SBI rate down to 16.08%

SBI rate down to 16.08%

JAKARTA: The weighted average interest rate on Bank Indonesia's one-month SBI promissory note declined to 16.08 percent at the weekly auction on Wednesday, from 16.26 percent at last week's auction.

Bank Indonesia said in a statement that it accepted Rp 20 trillion (US$2.16 billion) in bids at the auction, or 59.78 percent of total bids.

Analysts said the decrease in the SBI rate was in line with the government's policy of pushing rates lower to ease the government's funding burden.

Lower rates make it cheaper for the government to fund its budget deficit, which is estimated this year at 2.7 percent of gross domestic product. Government bonds issued to recapitalize the financial sector during the economic crisis pay interest rates linked to the SBI note. -- JP