Indonesia Central Bank Likely to Hold Rates Steady

By I Made Sentana Features Dow Jones Newswires

JAKARTA, Indonesia--Bank Indonesia is expected to leave interest rates unchanged Thursday, maintaining an accommodative stance to support the economy.

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All 11 economists polled by The Wall Street Journal expect the central bank to keep the benchmark seven-day reverse repo rate at 4.25%.

Southeast Asia's largest economy grew by a slower-than-expected 5.06% in the third quarter and is unlikely to meet the government's 5.2% growth target for the year, economists say.

Inflation remains benign and is likely to be within Bank Indonesia's 3%-5% target range for 2017.

"But caution is warranted, as the rupiah has started to weaken again in recent months," DBS economist Gundy Cahyadi said.

The rupiah has lost around 1.3% of its value against the U.S. dollar since the central bank's rate cut in August. Additional rate cuts may weaken the currency further, which in turn may stoke inflation and hinder economic growth.

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Last month, Bank Indonesia spent $3 billion of its foreign-exchange reserves to help defend the rupiah.

Write to I Made Sentana at i-made.sentana@wsj.com

(END) Dow Jones Newswires

November 15, 2017 04:44 ET (09:44 GMT)