Indonesia raises key interest rate on inflation fears
Wednesday, 6 August 2008
JAKARTA, Aug 5 (AFP): Indonesia's central bank raised its key interest rate today in a bid to dampen inflation after a hike in the price of subsidised fuel.
In the fourth rise in as many months, Bank Indonesia increased the benchmark rate by 25 basis points to 9.0 per cent, officials said.
"Bank Indonesia still sees risks of inflationary pressures from global oil and food prices, as well as from domestic demand," the central bank said in a statement after its monthly rate-setting meeting.
A 28.7-per cent average hike in fuel prices helped push year-on-year inflation to a higher than expected 11.9 per cent in July.
The fuel price rise sparked protests in Southeast Asia's largest economy and hit the poll ratings of President Susilo Bambang Yudhoyono ahead of elections next year.
In the fourth rise in as many months, Bank Indonesia increased the benchmark rate by 25 basis points to 9.0 per cent, officials said.
"Bank Indonesia still sees risks of inflationary pressures from global oil and food prices, as well as from domestic demand," the central bank said in a statement after its monthly rate-setting meeting.
A 28.7-per cent average hike in fuel prices helped push year-on-year inflation to a higher than expected 11.9 per cent in July.
The fuel price rise sparked protests in Southeast Asia's largest economy and hit the poll ratings of President Susilo Bambang Yudhoyono ahead of elections next year.