Indonesian Central Bank Raises Interest Rate to Contain Inflation

Believe it will help maintain financial stability


Indonesia's central bank on Thursday unexpectedly raised its benchmark interest rate for the first time since 2011 in a bid to contain rising inflation expectations and to maintain macroeconomic and financial stability.

The BI rate was lifted by 25 basis points to 6 percent from a record-low of 5.75 percent. The rate was on hold since a quarter-point reduction in February 2012. The BI rate was last raised in early 2011.