Indonesian central bank holds rate unchanged to keep rupiah stable

Indonesian central bank on Tuesday kept its benchmark interest rate steady at 7.5 percent to guard rupiah stability.

The lender said in a statement that the decision is still in line with its inflation target of 3 to 5 percent this year and next year and current account deficit of 2.5 to 5 percent. "The bank would consistently strengthen both monetary and macro- prudential, including strengthening effort for rupiah stability to maintain macro-economic and financial stability,"it said.

The rupiah has appreciated about 2 percent since it recorded the lowest level in 17 years in March.

The bank has anticipated possible risks of U.S. Fed Reserve plan to raise rate this year which may depreciate rupiah.

Rupiah had passed psychological level of 13,000 in March, even weakened to 13,200 per U.S. dollar. On Tuesday, rupiah was at the position of 12,979 per U.S. dollar, according to the central bank.

The bank has conducted intervention on currency market to guard rupiah, in part reducing its foreign exchange reserve by about 4 billion U.S. dollars to 111.554 billion U.S. dollars in March.

That led the bank to pause rate cut in the month after it trimmed the basic rate by 25 basis points to 7.50 percent in the previous month.

Indonesia's economy expanded by 5.02 percent in 2014, the lowest level since 1998 and for this year, the bank sees the growth accelerating at 5.4 to 5.8 percent.

The bank also kept the overnight deposit facility rate at 5.5 percent and lending facility at 8.0 percent. Endi