JAKARTA: Indonesia's central bank held its key interest rate at 7.50 percent Tuesday for the fifth consecutive month as inflation slowed and the trade balance improved in Southeast Asia's top economy.
A higher-than-expected February trade surplus and a deceleration of inflation last month to 7.32 percent have added to signs the economy has turned a corner after being hit by emerging market turmoil last year.
The rupiah and stocks have also bounced back after steep falls, which were sparked by speculation the US was set to begin tapering its huge stimulus programme.
The rupiah has gained about seven percent this year, with HSBC calling it one of the best-performing emerging market currencies of 2014.
Last year's turmoil prompted the bank to hike rates by 175 basis points, but economists now believe further increases are unlikely this year.
"We don't see any significant impetus for further rate hikes and expect rates to be kept unchanged for the rest of the year," said Capital Economics in a note.
The Jakarta stock market has also been boosted in recent weeks after the main opposition party nominated popular Jakarta governor, Joko Widodo, as its presidential candidate.
Widodo, considered a figure capable of pushing through much-needed economic reforms, is expected to move a step closer to the presidency Wednesday at nationwide legislative elections.
Polls predict his Indonesian Democratic Party of Struggle (PDI-P) will come out on top at the elections, which determine who can run in the July presidential polls.
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