BI cuts rate by 25 basis points to 7 percent
Aditya Suharmoko, The Jakarta Post, Jakarta | Wed, 06/03/2009 1:26 PM
The central bank has cut its benchmark interest rate by a further 25 basis points to 7 percent considering the domestic and global economic conditions.
"Uncertain global economic recovery and economic contractions in major trade partner countries continue to put pressure on Indonesia's export performance," Bank Indonesia (BI) spokeswoman Dyah Makhijani said in a statement Wednesday.
On the demand side, inflationary pressures keep decreasing, followed by a stronger rupiah and stable price of staple foodstuffs, BI said. On-year inflation in April stood at 6.04 percent, according to the Central Statistics Agency (BPS).
A stronger rupiah supported Indonesia's balance of payments and increased the foreign exchange reserves to US$57.9 billion at the end of May.
"BI will continue to oversee the potential of inflationary pressures in 2010 along with the estimated increase of world commodities. A stronger rupiah has contributed positively to the overall macro stability," said Dyah.
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