Central Bank Likely To Maintain Its Key Reference Rate

News: Bank Indonesia is likely to keep its key reference rate on hold at 7.5% at its policy meeting scheduled for January 9 2014, a Reuters poll revealed. Eight out of the 11 analysts surveyed predict the move to come following heavy tightening in 2013 though the risk of capital outflows continues. The poll's average estimates for the deposit facility rate (FASBI) and lending facility rate were 5.75% and 7.5% respectively. Four out of the five analysts with projections for Q114 expect an increase of 25 basis points (bps) to 75 bps in the benchmark rate, to contain pressures on the local currency as the government copes with a still-huge current account deficit.

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Geography: Indonesia

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