Indonesian central bank maintain rate steady at 7.5 pct

Indonesia's central bank held its benchmark interest rate unchanged at 7.5 percent on Tuesday after it unexpectedly cut the basic rate by 25 basis points last month, official said here.

The policy stressed that the lender sticks on its tough monetary policy.

The bank policy was in line with its policy to reach the targets of inflation and current account deficit this year, Tirta Segara, spokesman of the bank said.

"This policy aims at achieving inflation target of plus minus 4 percent (3 to 5 percent) and current account deficit gap at healthier level of 2.5 to 3 percent," he told a press conference at the bank headquarters.

The bank also held its overnight deposit rate facility and lending facility rate respectively at 5.50 and 8.00 percent, according to him.

Last month, the bank revised its inflation target this year to below 4 percent.

Indonesia's rupiah recently has been weakening at its lowest level since 1998.

On Tuesday the currency was traded at 13,181 against one U.S. dollar.

The lender has said that it focuses in maintaining the stability of rupiah and would persistently conducting intervention.

Spokesman Tirta said that the bank expects the economy to expand higher at the first quarter and will grow by 5.4 to 5.8 percent the whole year, supported by investment and huge infrastructure development.

Indonesian President Joko Widodo who came to office on Oct. 20, expects the economy to expand by an average of more than 7 percent annually at his five year terms. Endi