What Analysts Say About Bank Indonesia's Rate Increase Surprise
- Rupiah extends gains following decision; bond yield drops
- Central bank raises key rate by 50 basis points to 5.25%
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Bank Indonesia’s decision to raise benchmark rates more than expected underscored its determination to stabilize the market, analysts said, though they remained cautious over the outlook given the global trade row and the Federal Reserve’s tightening stance.
The central bank lifted the seven-day reverse repurchase rate by 50 basis points to 5.25 percent on Friday, marking a third hike in six weeks. Of the 31 economists surveyed by Bloomberg, 24 predicted a 25 basis-point hike and the rest forecast no change.