JAKARTA, Dec. 19 (Xinhua) -- The Indonesian central bank (Bank Indonesia) on Thursday held its benchmark interest rate steady, joining the U.S. Federal Reserve and most of other regional central banks as the lender closely monitors the global economic condition related with the external account.
The lender kept its seven-day reverse repurchase rate at 5 percent for a second straight meeting, Governor of Bank Indonesia Perry Warjiyo said.
"Going forward, Bank Indonesia will monitor the development of the global and domestic economic conditions to use a mixed and accommodating policy for maintaining inflation and external (payment) stability as well as spurring economic growth," Warjiyo said.
Months earlier the lender heralded to apply further loosening policies after aggressively ratcheting up the key rate by 100 basis points from July to October. Still, the recent neutral stance taken by the U.S. Federal Reserve led Bank Indonesia to follow maintaining the flow of capitals into the country.
Indonesia's November trade balance logged the highest deficit in seven months of 1.33 billion U.S. dollars as exports drifted down amid the recurrent global economic uncertainty, according to the Central Bureau of Statistics.
Bank Indonesia expects the current account deficit to improve this year with the range between 2.7 percent and 2.8 percent of the Gross Domestic Product (GDP), compared with nearly 3 percent of last year's GDP.
The widening current account gap is vulnerable to the volatility of Indonesian rupiah, which may become a target of speculative acts by the global currency speculators.
The Indonesian central bank ratcheted up the rate by 175 basis points last year to pare down risks of the U.S. Federal Reserve's hawkish stance on the flows of capitals and shore up rupiah.
