Central Bank of Indonesia raised the key rate for the third time in 6 weeks

Following the results of the meeting, the Central Bank of Indonesia raised the rate of 7-day REPO by 50 basis points to 5.25%. Also, the interest rate on loans was also increased by 50 points - up to 6%, and the rate on deposits - up to 4.5%. Most analysts had expected a 25 basis point rate hike. The bank raised the key rate for the third time in six weeks, trying to stop the collapse of the national currency and the outflow of capital, as well as to prevent increased inflation. Since early 2018, the Indonesian rupee has fallen in price against the US dollar by more than 5% to its minimum since October 2015 amid a capital outflow from emerging markets as a result of higher interest rates in the United States. To limit the fall of the rupee, the Central Bank of Indonesia spent 9 billion dollars of foreign exchange reserves.

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