Bank Indonesia's surprising rate hike to mitigate worse-than-expected trade deficit data


Bank Indonesia today surprised observers by raising both its lending and deposit facility rates by 25 basis points to 7.5% and 5.75% respectively, bringing the total rate hike this year to 175bp.

The unexpected rate hike today led some economists to suspect the current account deficit data to be released on Wednesday will be worse than expected. In its monetary policy statement, the central bank justified the move as another step to address the current account problem.

According to Gundy Cahyadi

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