SBI rate falls to 18.84%

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)