JAKARTA: Indonesia's central bank on Thursday raised its benchmark interest rate for the first time since November 2014, in a bid to support the weak rupiah and contain capital outflows.
The 7-day reverse repurchase rate was raised by 25 basis points to 4.50 percent, Bank Indonesia Governor Agus
Martowardojo said after the last policy meeting of his five-year term.
Thirteen of 21 economists polled by Reuters had predicted Thursday's hike.
The central bank's two other policy rates, which act as the floor and ceiling of the overnight money market, were moved in tandem with the main rate, to become 3.75 percent and 5.25 percent respectively.
The rupiah has been under pressure recently, trading at multi-year lows, as investors dumped emerging market assets as US bond yields rose and the dollar rallied.
In 2016 and 2017, BI slashed the key rate by 200 basis points in a bid to accelerate loan and economic growth, but the impact on bank lending was limited.
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