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08 June 2007
BI Rate Down by 25 Base Points

At a meeting of the Bank Indonesia (BI) Governors Board on Thursday (7/6), it was decided to lower the BI rate once again, this time by 25 base points to 8.50 percent from the previous 8.75 percent.

Budi Mulya, BI's Director of Strategic Planning and Public Relations, said that the lowering of the BI rate was based on consideration of the prospects of this year's inflation target of six plus-minus one percent and next year's five plus-minus one percent.

“The decrease was also following our in depth study of the latest economic and financial developments,” he said in Jakarta.

He went on to say that in general, the economy will still continue with a more balanced pattern.

This is reflected in the economic growth target of 5.7 percent, higher than BI's initial projection.

In addition, the Rupiah exchange rate in May also strengthened from an average Rp9.093 against the US dollar in April to Rp8.838 against the US dollar in May, 2007.

“May's inflation was also still maintained.”

Core inflation was recorded at 5.62 percent year on year, the lowest rate in the last six years.


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