BI Maintains Benchmark Interest at 6.5 Pct

Jakarta (Antara Bali) - Bank Indonesia has decided to maintain its benchmark interest rate (BI Rate) at 6.5 percent considered to be effective in controlling inflation.

Peter Jacobs, the director for communications of the central bank, said the BI Rate is also maintained in a bid to create a more sustainable balance of payments and to strengthen the stability of the financial system.

Peter said in a news conference after the regular meeting of Board of Governors of the central bank on Thursday a number of monetary policy and macro prudential instruments were optimized to control inflation and create sustainable balance of payments.

Steps to strengthen monetary operations would continue to intensify control of excess liquidity, which tended to rise after the Ramadhan, the Islamic fasting month.

Bank Indonesia, therefore,  will issue Bank Indonesia Deposit Certificate (SDBI)  and improve stipulation on minimum reserve requirement (GWM) of loan to deposit ratio (LDR) and secondary minimum reserve requirement (GWM).

"GWM-LDR is aimed at strengthening credit disbursement capacity  and  fund collection prudently  and secondary GWM is to strengthen bank liquidity management," he explained.

The following step is to sustain long term stability of rupiah in line with the condition of the economic fundamentals, he said.

Bank Indonesia will also carry out supervisory actions to control credit expansion, which is still relatively high by a number of bank. (*/DWA)