JAKARTA, Indonesia (AP) -- Indonesia's central bank raised its benchmark interest rate by half a percentage point to 7 percent, hoping to stem a slide in the local currency and keep the country's current account deficit at a sustainable level.
Bank Indonesia spokesman Difi A. Johansyah says Thursday the rate hike is expected to strengthen control of inflation and mitigate the risk of further rupiah depreciation.
The rupiah has lost nearly 9 percent against the U.S. dollar so far this year and is at its lowest level in four years.
Emerging economies including India, Indonesia and Brazil have suffered an exodus of short-term foreign investment capital, often known as "hot money," as propsects for developed economies including the U.S. and Europe improve.
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