Indonesian central bank keeps rate unchanged as assets repatriation looms

Indonesian central bank on Thursday unexpectedly held its benchmark interest rate unchanged as the country gears up for huge asset repatriation.

The board meeting decided to keep the benchmark 12-month reference rate at 6.5 percent, Agus Martowardojo, governor of the bank said. That is against most of analysts' expectation of another cut.

The lender also kept the 7-day reverse repurchase rate at 5.25 percent, and deposit facility rate and lending facility rate at 4.5 percent and 7.00 percent respectively, he said at the bank headquarters.

Last month the government and parliament endorsed the tax amnesty law, which has bolstered stock markets, triggered capital inflows and strengthened rupiah against the U.S. dollar, amid the hope that it will spur a massive influx of repatriated assets.

Indonesia said 165 trillion rupiah (some 16.5 billion U.S. dollars) out of 3,147 trillion rupiah (equal to 314,7 billion U.S. dollars) funds owned by Indonesian nationals overseas could be repatriated.

Lawmakers and the government agreed to maintain rupiah at 13,300 to 13,600 at the assumption of next year's state budget assumptions.

That compared with the currency position on Thursday of 13,122 against one U.S. dollar, according to the website of the central bank.

The exit of UK from the EU group (Brexit) and reduction of the IMF's forecast on global economic growth have countered expectation of possible rate cut at the U.S. Fed Reserve meeting this month.

Indonesia expects the GDP growth at 5.0 percent this year and 5.2 to 5.6 percent next year, Finance Minister Bambang Brodjonegoro has revealed. Endit