ID :
17818
Tue, 09/02/2008 - 18:56
Auther :
Shortlink :
http://m.oananews.org//node/17818
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OBSERVER PREDICTS BI TO RAISE BENCHMARK RATE
Jakarta, Sept 2 (ANTARA) - The annual inflation rate which has reached 11.5 percent will prompt the Indonesian central bank (Bank Indonesia/BI) to once again raise its benchmark interest rate (BI Rate) which at present stands at 9.0 percent, an economic observer said.
"BI will once again raise its rate by 25 basis points to 9.25 percent in an effort to curb the upward trend in inflation which has exceeded the government's target of 11.2 percent," Edwin Sinaga said here on Tuesday.
He said that the increase in the BI Rate was expected to encourage foreign investors to place their funds again in the Indonesian money markets.
"So far, many foreign investors have withdrawn their funds and invested their money in other markets which are more profitable," he added.
Sinaga said that the rise in the BI Rate was also expected to help improve the rupiah exchange rate after it had plunged in he last several days to a level almost reaching Rp9,200 a US dollar.
He said that BI would likely try its best to maintain the rupiah rate at below Rp9,200 per dollar by releasing funds from its dollar reserves.
"We predict that BI will intervene in the market by releasing funds from its dollar currency reserves in order to prevent the rupiah from falling too far," he added.
He said that the rupiah would be in a secure position if its rate could be maintained at between Rp9,150 and Rp9,175.
Sinaga said that the rupiah exchange rate which had reached Rp9,195 as a result of inflation rumors had caused a serious concern.
He said inflation would reach 12 percent due to various negative factors at home.
According to Sinaga, the fuel oil price hikes last May no longer had an effect on inflation. "What matters now and affects inflation is the increase in the price of liquefied natural gas," he added.
"BI will once again raise its rate by 25 basis points to 9.25 percent in an effort to curb the upward trend in inflation which has exceeded the government's target of 11.2 percent," Edwin Sinaga said here on Tuesday.
He said that the increase in the BI Rate was expected to encourage foreign investors to place their funds again in the Indonesian money markets.
"So far, many foreign investors have withdrawn their funds and invested their money in other markets which are more profitable," he added.
Sinaga said that the rise in the BI Rate was also expected to help improve the rupiah exchange rate after it had plunged in he last several days to a level almost reaching Rp9,200 a US dollar.
He said that BI would likely try its best to maintain the rupiah rate at below Rp9,200 per dollar by releasing funds from its dollar reserves.
"We predict that BI will intervene in the market by releasing funds from its dollar currency reserves in order to prevent the rupiah from falling too far," he added.
He said that the rupiah would be in a secure position if its rate could be maintained at between Rp9,150 and Rp9,175.
Sinaga said that the rupiah exchange rate which had reached Rp9,195 as a result of inflation rumors had caused a serious concern.
He said inflation would reach 12 percent due to various negative factors at home.
According to Sinaga, the fuel oil price hikes last May no longer had an effect on inflation. "What matters now and affects inflation is the increase in the price of liquefied natural gas," he added.
