Bank Indonesia turns to smaller rate hike as risks wane

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JAKARTA (Bloomberg): Indonesia’s central bank slowed the pace of interest-rate increase to a quarter-point on Thursday (Dec 22), noting that easing inflationary and currency pressures call for a calibrated monetary tightening.

Bank Indonesia lifted the seven-day reverse repurchase rate to 5.5% on Thursday, as seen by 20 of 27 economists in a Bloomberg survey. Six expected the central bank to continue with a half-point rate increase, while one predicted no change. The decision takes the cumulative rate hikes this year to 200 basis points.