ID :
34271
Sat, 12/06/2008 - 18:00
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Shortlink :
http://m.oananews.org//node/34271
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BI RATE CUT INSIGNIFICANT TO BOOST REAL SECTOR: OBSERVER
Jakarta, Dec 6 (ANTARA) - The lowering by Bank Indonesia (BI) of its benchmark interest rate (BI Rate) by 25 basis points to 9.25 percent will likely have no significant direct impact on the development of the real sector, an observer said.
"The BI Rate cut by 25 basis points is comparable to a piece of candy which offers sweet taste for a few minutes only," economic observer Muhaimin Iqbal said here on Friday.
He said that the BI Rate cut could only have small effect on both macro and micro economic development in the country and would not directly improve the economy.
"The main problem is that the value of the rupiah remains too low against the US dollar," he added.
Iqbal said that the BI rate cut would however have relatively significant impact on the financial sector where banks' shares would become attractive again.
The board of governors of Bank Indonesia (BI or central bank) decided on Thursday to lower the benchmark interest rate (BI Rate) by 25 basis points to 9.25 percent.
"With the decision to lower the BI Rate by 25 basis points to 9.25 percent it is hoped the business climate can remain stimulating amid the world economic meltdown," the BI board of governors said in a statement.
"The BI Rate cut by 25 basis points is comparable to a piece of candy which offers sweet taste for a few minutes only," economic observer Muhaimin Iqbal said here on Friday.
He said that the BI Rate cut could only have small effect on both macro and micro economic development in the country and would not directly improve the economy.
"The main problem is that the value of the rupiah remains too low against the US dollar," he added.
Iqbal said that the BI rate cut would however have relatively significant impact on the financial sector where banks' shares would become attractive again.
The board of governors of Bank Indonesia (BI or central bank) decided on Thursday to lower the benchmark interest rate (BI Rate) by 25 basis points to 9.25 percent.
"With the decision to lower the BI Rate by 25 basis points to 9.25 percent it is hoped the business climate can remain stimulating amid the world economic meltdown," the BI board of governors said in a statement.
