Indonesia prolongs halt in key rate rises

JAKARTA. Bank Indonesia (BI) held its key interest rate for a seventh straight meeting, citing risks from the global economy as growth slows.

Governor Agus Martowardojo and his board maintained the reference rate at 7.5 percent, the central bank said in Jakarta on Thursday, a decision predicted by all 20 economists surveyed by Bloomberg News. It also kept the deposit facility rate unchanged at 5.75 percent.

Indonesia’s growth has been restrained by interest-rate increases last year that curbed investment and a mineral-ore export ban that hurt the mining industry. Southeast Asia’s largest economy is also struggling to narrow a current-account deficit driven by oil product imports, prompting both candidates for president to pledge fuel-subsidy cuts.

“We expect the current account to remain contained as the slowdown in the economy continues to drag on imports,” Gareth Leather, Asia economist at Capital Economics Ltd., said in a note after the decision. “BI’s focus is instead likely to shift towards supporting growth.”

The benchmark Jakarta Composite Index of stocks fell 0.8 percent at the close, trimming earlier losses after the rate decision. The rupiah rose 0.2 percent to 11,788 per dollar as of 5:17 p.m. local time, prices from local banks show.