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