SBI rate falls to 14.07%

SBI rate falls to 14.07%

JAKARTA: The weighted average interest rate on the benchmark one-month SBI promissory notes fell to 14.07 percent at an auction Wednesday from 14.35 percent a week ago, the central bank said.

The fall was below market expectations. Players had expected the rate to fall to around 14.15 percent.

Bank Indonesia said it accepted Rp 13 trillion (US$1.4 billion), or 69.83 percent of the bids received at the auction.

The central bank has been trying to drive domestic interest rates lower to help reduce the cost of servicing bonds taken on by the government to bail out local banks after the 1997 Asian financial crisis.

The central bank also auctioned Rp 9 trillion of three-month SBI notes, or 56.21 percent of total bids, at a weighted average interest rate of 14.11 percent, down from 14.99 percent early last month.

Bank Indonesia officials have said the central bank is trying to push the SBI benchmark rate down to between 13.5 percent and 14 percent by the end of the year. -- Dow Jones