Indonesia's central bank left interest rates unchanged for the seventh consecutive month on Thursday as a slowdown in growth helped to contain the current account.
The Board of Governors decided to leave the BI rate unchanged at 7.5 percent, the Bank Indonesia said in a statement. The decision was in line with economists' expectations.
The lending facility rate was kept at 7.5 percent and the deposit facility rate, also known as the FASBI, at 5.75 percent.
"The policy is consistent with ongoing efforts to steer inflation back towards its target corridor of 4.5±1% in 2014 and 4.0±1% in 2015, as well as reduce the current account deficit to a more sustainable level," the central bank said.
Capital Economics' Asia Economist Gareth Leather thinks Bank Indonesia's focus is likely to shift towards supporting growth. "Provided the current account does not jump back up again and the rupiah remains fairly stable, we think the next move in rates will probably be down, although not until early next year," the economist added.
The bank also considers the ongoing economic re-balancing process to be progressing as expected, despite several risks that require vigilance, and said it will continue to institute anticipatory measures to ensure the inflation target can be achieved and current account performance can be improved.
Economic growth slowed more-than-expected in the first quarter to 5.21 percent year-on-year, the slowest since the third quarter of 2009, as tight monetary policy weighed on investment and mineral ore export ban dragged shipments.
Further, the bank chose to maintain status quo ahead of the presidential election scheduled for July 9.
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