Bank Indonesia holds interest rate at 4.75%

JAKARTA • Indonesia's central bank left its benchmark interest rate unchanged on Thursday, as expected, but puzzled analysts by delaying the announcement till nearly midnight.

Bank Indonesia held its benchmark rate at 4.75 per cent, with bank spokesman Arbonas Hutabarat saying yesterday that the meeting was delayed because several central bank board members had attended a ceremony at the Financial Services Authority earlier.

Indonesia cut interest rates six times last year and eased reserve limits on lenders this month to spur lending and support economic expansion. The monetary authority said on Thursday that inflation will remain within its 3 per cent to 5 per cent target band, while the rupiah has stabilised.

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China central bank adds $8b to boost cash supply

BEIJING • China's central bank used its open-market operations to boost the supply of cash in the financial system, after demand driven by tax and dividend payments pushed the overnight money rate to a four-week high.

The People's Bank of China added a net 40 billion yuan (S$8 billion) through reverse- repurchase agreements yesterday, bringing this week's injections to 510 billion yuan, the most in six months.

The monetary authority also reportedly added funds through some commercial lenders.

The nation's interbank funding costs have risen this week amid signs the government is in no hurry to let up on its efforts to reduce borrowing levels.

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