Indonesia central bank leaves interest rates steady, revises 2016, 2017 growth outlook

The entrance at Indonesia's central bank Bank Indonesia in Jakarta.
The entrance at Indonesia's central bank Bank Indonesia in Jakarta. PHOTO: REUTERS

JAKARTA (REUTERS) - Indonesia's central bank on Thursday held its benchmark interest rate steady, as expected, saying the level was in response to global uncertainty after the results of the United States election.

Bank Indonesia, however, said on Thursday that it expected the country's economy to grow 5 per cent this year, revising its previous target range of 4.9-5.3 per cent.

Bank Indonesia Governor Agus Martowardojo revised next year's GDP growth outlook to 5.0-5.4 per cent, from 5.1-5.5 per cent, and said growth in the fourth quarter is likely to be limited due to a cut in government spending.

Bank Indonesia (BI) kept the 7-day reverse repurchase rate at 4.75 per cent.

Consequently, its two other main rates that act as the floor and ceiling of the overnight interbank money market were also held at 4.00 per cent and 5.50 per cent, respectively.

BI has cut its old and current benchmark rates by a total of 150 basis points this year to try to get the economy to grow faster. Until August, BI's main policy rate was the 12-month reference rate. The benchmark change was made to enhance the effect of monetary easing on market rates.