SBI rate down slightly to 13.08%

SBI rate down slightly to 13.08%

JAKARTA: The weighted average interest rate on one-month Sertifikat Bank Indonesia notes, as expected, edged down slightly to 13.08 percent from 13.10 percent in a weekly auction, the central bank said Wednesday.

Bank Indonesia said it accepted Rp 12 trillion (US$1.32 billion) of bids at the auction, or 66.6 percent of total bids.

The drop in the yield is the first fall after Bank Indonesia raised the rate to prop up the rupiah, which came under selling pressure following last month's Bali bombings.

But the rupiah has regained most of its lost ground against the dollar, leaving room for the central bank to guide the rate lower again.

The rupiah fell to Rp 9,400 per dollar after the Bali blasts last month. Since then the rupiah has slowly recovered, to Rp 9,055 currently.

Lowering interest rates will help reduce the costs the government shoulders to bail out the local banking system as well as spur economic growth. -- Dow Jones