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Indonesia Interest Rates Unchanged After Two Hikes

Indonesia's central bank left its key interest rate unchanged in October after hiking it in the previous two policy sessions.

The Board of Governors left the 7-day reverse repo rate unchanged at 5.75 percent, Bank Indonesia said on Tuesday.

The move was in line with economists' expectations. The bank had hiked the rate by a quarter-point each, both in August and September.

"The decision is consistent with ongoing efforts to reduce the current account deficit within a manageable threshold, while maintaining the attractiveness of domestic financial markets, thereby bolstering external resilience in Indonesia against a backdrop of persistently high global uncertainty," the bank said in a statement.

The central bank aims to reduce the current account deficit to 2.5 percent of GDP projected in 2019.

Third quarter economic growth was lower than expected, mainly due to a decrease in net exports, the bank said.

The growth projection for exports has been downgraded on weaker agricultural and mining export performance, while the import growth remain robust due to solid domestic demand, the bank added.

Bank Indonesia expects national economic growth this year to be at the lower range of 5.0-5.4 percent. Headline inflation is projected within the target range of 3.5 percent plus or minus 1 percent this year.

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