SBI rate falls to 18.84%

JAKARTA (JP): The interest rate on the central bank's one- month deposit notes (SBI's) fell at the weekly auction on Wednesday to a weighted average yield of 18.84 percent, from 20.34 percent last week.

The central bank, Bank Indonesia (BI), absorbed Rp 12.75 trillion (about US$1.9 billion) at the SBI auction, BI said in a statement.

The above absorbed amount was about 91 percent of the total bids submitted to BI.

The Indonesian government, closely advised by the International Monetary Fund (IMF), has lately taken a consistent step in reducing the interest rates to reach a level suitable for business investment.

The SBI rate, which surged to as high as 70 percent in August last year, has showed a gradual decline in the past three months in line with easing inflation rates.

BI estimates that the SBI rate will return to the precrisis level of about 15 percent before the close of this year.(udi)