Indonesia to target overnight rate
Thomson Financial, a news service, reported that Hartadi Sarwono, a deputy governor at the central bank, said over the weekend that he plans to make the overnight rate, the cost at which money market participants borrow, more stable by ensuring it was aligned more closely with the benchmark BI rate.
"In the past, the overnight rate was very volatile," Sarwono said. "Such a situation makes it difficult for banks to manage their day-to-day liquidity."
He added that the overnight rate had been less volatile in recent weeks and so the decision would not lead to significant upheavals in financial markets.
The BI rate is now 8.5% after the central bank decision to raise it a quarter point last week.
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