Indonesia's central bank left its key interest rate unchanged for eighth straight month as widely expected by economists.
The Board of Governors maintained the benchmark rate at 7.50 percent, the Bank Indonesia said in a statement on Thursday. The deposit facility rate was retained at 5.50 percent and the lending facility at 8.00 percent.
The bank forecast inflation for 2015 to remain below the mid-point of the target of 4 percent. The bank said the main focus in the short term would be on stabilizing the exchange rate.
Looking ahead, Gareth Leather at Capital Economics expects interest rates to be cut before the end of the year, but much will depend on what happens to the currency.
With US rate hikes now unlikely to arrive until 2016, and sentiment toward Indonesia's economy clearly improving, the economist expects the currency to start to stabilize, providing room for central bank to loosen policy.
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