BI kept interest rate unchanged

The central bank left its key interest rate unchanged on Tuesday in a bid to spur economic growth amid stable inflation and a strong rupiah.

“The benchmark rate at the current level still supports economic growth amid ample liquidity in the market and persistent inflow of capital,” BI said in a statement on Tuesday.

The bank last shifted its monetary policy in February, when it raised the rate by a quarter percentage point.

The Central Statistics Agency (BPS) reported this month that the annualized inflation rate slowed in June to 5.54 percent — the lowest in a year — from 5.98 percent in May, as chili prices eased after soaring last year.

Costs of chili, a staple on many dinner tables, rose when severe weather disrupted harvests and hurt supplies. The June inflation figure was still within BI’s target range of 4 percent to 6 percent this year.

Net foreign direct investment is forecast to rise to $16.7 billion this year from more than $13 billion last year.