SBI rate stays at 16.83%

SBI rate stays at 16.83%

JAKARTA: The weighted average interest rate on one-month Bank
Indonesia SBI promissory notes was unchanged at 16.83 percent
during the weekly auction on Wednesday, Bank Indonesia said.

The central bank said that it had accepted Rp 19.75 trillion
(US$1.98 billion) in bids at the auction, or 86.54 percent of the
total bids received.

Bank Indonesia has been trying to bring the benchmark interest
rate lower since early this year to help minimize the burden on
the government in paying the interest on bank recapitalization
bonds. The interest on one-month SBI notes stood at nearly 18
percent late last year.

However, fears of inflation are limiting the central bank's
room to maneuver in lowering the interest rate, analysts said.
-- JP