JAKARTA, Oct 21 (Reuters) - Indonesia's central bank has decided to keep its main interest rate steady for the fourth consecutive policy meeting, while raising the deposit facility rate. This action comes amid a significant two-day decline in the country's stock market and the rupiah facing pressure near its historical low.
Read More
Bank Indonesia maintained the benchmark 7-day reverse repurchase rate at 5.75%, aligning with the expectations of 15 out of 29 economists surveyed by Reuters. The remaining economists had anticipated a rate hike of at least 25 basis points to address the recent market selloff.
In addition to holding the benchmark rate, the central bank raised the overnight deposit rate by 25 basis points to 5.00%, but kept the lending facility rate unchanged at 6.50%. Previously, the bank increased rates by 100 basis points in three instances between May and June to support the rupiah.
The recent decline in the rupiah was exacerbated by a warning from MSCI last week, indicating the possibility of downgrading Indonesian equities to "standalone" market status.