SBI rate falls to 15.17%

SBI rate falls to 15.17%

JAKARTA: The weighted average interest rate on one-month Bank Indonesia SBI promissory notes fell sharply Wednesday in line with plans to lower rates to reduce the cost on the government of funding its budget deficit, the central bank said.

One-month SBI notes stood at 15.17 percent at the weekly auction, down from 15.51 percent last week, Bank Indonesia said.

Bank Indonesia said it accepted Rp 14.83 trillion in bids at the auction, or 99.97 percent of total bids.

The central bank has been pushing rates lower since the start of the year.

Lower interest rates cut the cost to the government of funding its budget deficit, which is set to total 2.5 percent of gross domestic product this year.

The government must pay interest on billions of dollars of bonds issued since the 1997 Asian financial crisis to recapitalize the banking sector. The interest rates on many of the bonds are linked to the SBI notes. -- Dow Jones