BI Again Cuts Key Rate To 4.75 Percent

Jakarta (Antara Bali) - Bank Indonesia (BI) for the sixth time this year lowered its benchmark rate by 25 points to 4.75 percent in October, fueled by controllable inflation rate expected to reach 3-3.5 percent this year.

"It is quite delightful in the third quarter of 2016. We predict the current account deficit will stay below 2 percent of the national gross domestic product, well below the previous expectation. Likewise, the inflation rate also remains under control," BI's executive director of economic and monetary department, Juda Agung said here on Thursday.

In the remaining two months of this year, the monetary sector still has a chance to ease, as reflected by low inflation rate and improving current account deficit, he said.

He believed the year-end inflation may be lower than BI's forecast of 4, plus and minus 1 percent as the inflation rate stood at 3.07 percent year on year in September.

In October, inflationary pressure is also expected to ease, he said.

"The inflation rate is quite controllable and is relevant to its history. We predict it will be below 3-3.5 percent," he said.

The central bank noted that the current account deficit is lower than expected.

He believed the current account deficit in the third quarter of 2016 will be less than 2 percent of the GDP owing to continued trade surplus. (WDY)