Indonesia Keeps Rates On Hold

(RTTNews) - Indonesia's central bank left its key interest rate unchanged for the ninth consecutive month as policymakers are still concerned about huge current account deficit.

The Board of Governors of the Bank Indonesia on Thursday decided to maintain the BI Rate at 7.50 percent. The outcome of the meeting came in line with economists' expectations.

In July, inflation slowed to 4.53 percent in July from 6.7 percent in June. The bank said the policy is consistent to keep inflation within the 3.5-5.5 percent target this year.

The bank said it will coordinate with the government in controlling inflation and the current account deficit and maintain a sustainable growth in future.

Looking ahead, ongoing concerns about the current account deficit make it unlikely that BI will cut rates this year, despite the struggling economy, Gareth Leather, an Asian economist at Capital Economics, said.

In the second quarter, Indonesia's economy expanded at the slowest rate since 2009 on weak demand. Gross domestic product increased 5.12 percent year-over-year in the second quarter following the 5.22 percent increase in the previous quarter.