Bank Indonesia raises policy rate by 0.5 point, exceeding market expectations

The rupiah's decline and capital outflow prompts hike decision for first time in 25 months

Bank Indonesia has kept interest rates unchanged for the previous seven months. (Photo by Yuki Kohara)

JAKARTA -- Indonesia's central bank decided to raise its key rate for the first time in more than two years at its two-day monthly policy meeting that concluded on Wednesday, prioritizing rupiah stabilization and foreign portfolio inflows.