Indonesia keeps interest rate at 9.50pc
Friday, 7 November 2008
JAKARTA, Nov 6 (AFP): Indonesia's central bank maintained its benchmark interest rate at 9.50 per cent today despite rate cuts in major countries amid the global economic slowdown, officials said.
Bank Indonesia Governor Boediono said there would be no change to the key rate which was hiked 25 basis points in early October.
Analysts said the bank was responding to easing inflationary pressures and the realisation that a recent slide in the rupiah was part of the global financial crisis.
"Inflation has probably peaked and rupiah weakness is part of a region-wide move that has resulted from heightened global risk aversion," an analyst told Dow Jones Newswires.
Analysts said that a rate cut before the end of the year was unlikely. However, they predicted that the central bank would loosen its rate in early 2009 as inflation begins to ease.
Bank Indonesia Governor Boediono said there would be no change to the key rate which was hiked 25 basis points in early October.
Analysts said the bank was responding to easing inflationary pressures and the realisation that a recent slide in the rupiah was part of the global financial crisis.
"Inflation has probably peaked and rupiah weakness is part of a region-wide move that has resulted from heightened global risk aversion," an analyst told Dow Jones Newswires.
Analysts said that a rate cut before the end of the year was unlikely. However, they predicted that the central bank would loosen its rate in early 2009 as inflation begins to ease.