Bank Indonesia maintains interest rate at 5.75 percent

Bank Indonesia’s board of governors has decided to maintain the central bank’s benchmark interest rate at 5.75 percent.

“The interest rate level is still consistent with the prediction that future inflation will remain low and convenient within the estimated range, which is 4.5 percent with both top and lower margins of 1 percent for the year 2012 and 2013,” central bank spokesman Difi Johansyah said in a statement Tuesday.

“To sustain the pressure on exchange rates due to the deepening crisis in Europe and global financial markets’ negative sentiments, Bank Indonesia will push for an increased foreign exchange supply on the market so that the rupiah rate will remain consistent with fluctuations in the Asian region and Indonesia’s fundamental economic condition,” he added.

Difi added that Bank Indonesia also believed that Indonesia had sufficient resiliency to survive the uncertainties of global economic conditions.

“Economic growth in the second quarter of 2012 and for the whole year is estimated at between 6.3 percent and 6.7 percent with a risk bias that tends to go for the low estimation range,” he added.

Domestic consumptions and strong investments will remain the main sources of economic growth, according to Difi.(dic)