SBI down at 16.70 percent

SBI down at 16.70 percent

JAKARTA : The weighted average interest rate on Bank Indonesia one-month SBI promissory note notes fell at auction, the central bank said Wednesday.

The one-month SBI notes stood at 16.70 percent at the weekly auction Wednesday, down from 16.74 percent last week, Bank Indonesia said.

The central bank said it accepted Rp 19.00 trillion in bids at the auction, or 90.6 percent of total bids.

Indonesia has been cutting rates to help reduce the cost of the government's large budget deficit.

Lower inflation in March, with consumer prices falling 0.02 percent compared with February, are helping keep interest rates on the downside.

But the inflation rate remains fairly high on a year-on-year basis, rising 14.08 percent in March, meaning interest rates are unlikely to go much lower.

SBI rates have come down from just below 18 percent at the end of last year, spurring local investors, including banks and pension funds, to put money into higher yielding corporate bonds. -- Dow Jones