REPUBLIKA.CO.ID, JAKARTA - Bank Indonesia (BI) increases BI rate for the fourth time since early June to support weakening currency and cool inflation expectations. BI increased its reference rate by 25 basis points (bps) to 7.25 percent.

"Meeting of Board of Governors decided to rise BI rate by 25 bps, from seven percent to 7.25 percent," Executive Directors of Department of Communication in BI, Difi A Johansyah said on Thursday.

Johansyah said BI also increased its lending facility by 25 bps at a level of 7.25 percent and also its interest rates of deposit facility by 25 bps at a level of 5.5 percent.

Head of Economists in Bank Mandiri, Destry Damayanti said this outcome was predicted by four of 23 economists surveyed by Bloomberg. BI had now increased its reference rate about 150 bps since it began a tightening policy last June.

"Indonesia has joined Brazil and India in taking steps to support their currencies as prospect of reduced US monetary stimulus prompts investors to sell emerging market assets," Damayanti said. 

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