SBI rate down to 9.53%

JAKARTA: The interest rate of one-month Bank Indonesia SBI promissory notes fell to a six-year low of 9.53 percent during the weekly Wednesday auction, from 9.71 percent the previous week.

The central bank has been guiding its benchmark rate down in the hope of encouraging banks to lower their lending rates and help the corporate sector obtain cheaper loans for working capital.

The lower rate should also help ease the government's burden in servicing its huge domestic debt.

Analysts have said that the SBI rate could still go down further, especially if inflation could be kept below 7 percent.

Last month's annualized inflation was calculated at 6.9 percent. -- JP