BI interest rate up to 7.41%

The yield on one-month Bank Indonesia promissory notes increased to 7.41 percent on Wednesday during a regular bi-weekly auction from 7.4 percent previously.

The central bank said it sold Rp 35.1 trillion (about US$3.86 billion) of 32-day bills, accepting 99.9 percent of the bids. The bills will mature on Nov. 22.

Bank Indonesia has been reluctant to raise its benchmark interest rates in an attempt to help push economic growth higher. The economy grew by 4.3 percent in the second quarter, after growing 5 percent in the first three months of the year. The government expects growth this year to accelerate to 4.8 percent from 4.1 percent last year.

A number of analysts have previously suggested the central bank to raise the benchmark interest rate to help defend the rupiah and curb inflationary pressure. -- JP