BI benchmark rate down again<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Bank Indonesia said the interest rate on its one-month SBI
\npromissory notes declined again during the weekly Wednesday
\nauction, which is surprising given the expected strong
\ninflationary pressure this month as a result of the utility price
\nhikes.<\/p>\n
The benchmark rate slipped to 12.89 percent from 12.93 percent
\npreviously.<\/p>\n
The central bank said it had accepted Rp 20 trillion in bids
\nfor the one-month SBI notes, or 66 percent of the total bids
\nreceived.<\/p>\n
Bank Indonesia also said it had auctioned Rp 16 trillion of
\nthree-month SBI notes, or 80 percent of the total incoming bids.
\nThe weighted average rate of the three-month SBI notes fell to
\n12.94 percent from 13.11 percent.<\/p>\n
The central bank has been aiming to lower the benchmark rate
\nsince the beginning of 2002 when it stood at more than 17
\npercent. The move was crucial to help push the banking sector to
\nprovide cheaper loans for businesses, and to reduce the state
\nbudget burden in covering the interest rates of government bonds.<\/p>\n
But many said earlier that it would be unlikely for the
\ncentral bank to let the benchmark rate drop again this week to
\nhelp curb the strong inflationary pressure resulting from the
\nrecent increases in fuel, electricity and telephone charges.<\/p>\n
The rate cut may indicate the central bank is not overly
\nconcerned with the impact of the recent price hikes on inflation
\nfor the whole year. Bank Indonesia instead still wants to guide
\nrates lower to help spur economic growth and reduce the weighty
\ncosts of the bailout program for the financial sector.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bi-benchmark-rate-down-again-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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