Indonesia will do whatever it takes to prop up its battered currency and reassure investors that it can control a wide current-account deficit. This, say analysts, is the clear message from a surprise hike in interest rates.
On Tuesday, Bank Indonesia unexpectedly lifted its overnight lending rate by 25 basis points to 7.50 percent. It also increased the overnight deposit facility rate, known as the FASBI, by 25 basis points to 5.75 percent.
Since June the central bank has lifted rates by a hefty 175 basis points, taking the key rate to its highest level since 2009.
via CNBC
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Alfonso Esparza
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
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