The Central bank in a monthly meeting of its Board of Governors on Thursday decided to raise its "7-Day Reverse Repo Rate" 25 basis points to 4.5 percent in a bid to prop up the national currency rupiah.
Despite the expected decline the Central Bank still maintains its target for the country`s economic growth at 5.1-5.5 percent (yoy), Deputy Governor Dody Budi Waluyo told reporters here on Thursday.
"Perhaps the growth would be lightly lower than our previous target," Dody said.
Growth in the rest of the year would be driven by investment and household consumption, he said.
Household consumption in the first quarter of this year grew below 5 percent and investment expanded nearly 8 percent.
Bank Indonesia Governor Agus Martowardojo said the increase in the benchmark interest rate is to prevent rupiah from falling deeper as a result of the U.S central bank raising its fund rate.
"If rupiah is allowed to lost more value could result in an increase in inflation," Agus said.
Rupiah has depreciated 2.06 percent from January to April (year to date).
(AS/S012)
(T.SYS/B/H-ASG/S012)
Reporter: ANTARA
Editor: Heru Purwanto
Copyright © ANTARA 2018
