SBI rate down to 10.27%<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The interest rate on the one-month Bank Indonesia SBI promissory
\nnotes fell to 10.27 percent on Wednesday from 10.44 percent in
\nthe previous week.<\/p>\n
The central bank said that the interest rate on the three-
\nmonth notes also declined to 10.18 percent from 10.88 percent.<\/p>\n
Bank Indonesia has been guiding downward its benchmark rate in
\nthe past year amid a relatively low inflationary environment.
\nThe interest rate on the one-month SBI notes was at more than 17
\npercent early last year.<\/p>\n
The Central Statistics Agency (BPS) announced earlier this
\nweek that the inflation rate in May rose by 6.91 percent compared
\nto the same month last year. This annualized rate was lower than
\n7.4 percent posted in April.<\/p>\n
The lower interest rate would help ease the burden of the
\ngovernment in covering its huge domestic debts and make bank
\nlending for affordable for the corporate sector.<\/p>\n
However, analysts have said that a decline in the interest
\nrate of the three-month SBI would affect earnings of many banks
\nwhose productive assets are mainly in the form of government
\nrecapitalization bonds, which carry both a fixed rate and
\nvariable rate, linked to the SBI rate.<\/p>\n
Bonds which will be mostly affected are those carrying a
\nvariable interest rate.<\/p>\n
Bank Indonesia Burhanuddin Abdullah has recently said that he
\nwanted to see the benchmark rate down to near the 10 percent
\nlevel to help push more bank lending to the real sector.<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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