BI Rate Back 6.75 Percent Survived

Board of Governors of Bank Indonesia back its benchmark interest rate (BI Rate) of 6.75 percent. BI continues to hold the BI Rate at 6.75 percent level since February 2011.
In a press release Thursday, September 8, 2011, the central bank said, in the framework of activities at the interbank money market in between the magnitude of all this excess liquidity, the central bank widens the lower limit of operation of monetary interest rate corridor which was originally 100 basis points (bps) to 150 bps below the BI Rate.This decision was made taking into account the need to maintain economic stability amid rising uncertainty of global financial system, which triggered the debt problems of America and Europe. Nonetheless, the turmoil caused uncertainty in the global economy is still limited.In addition, the central bank continued to examine the impact of the global financial and economic performance of Indonesia's economic performance in the future.In this regard, the central bank will take the response of interest rates and monetary policy mix and other makroprudensial to mitigate the potential decline in Indonesia's economic performance with a fixed priority to achieving the inflation target of 5 percent 5 percent ± 1 percent in 2011 and 4.5 percent ± 1 percent in 2012."BI will also strengthen policy coordination with the government in order to address the decline in global economic and financial impact," said Head of Public Relations BI, Difi A Johansyah, in a press release in Jakarta.Board of Governors to assess the performance of the domestic economy has so far shown good resistance amid growing concerns over world economic prospects.Economic growth in the third quarter of 2011 is estimated at 6.6 percent, underpinned by exports, consumption, and investment.
Exports expected to grow still higher in line with forecasts of world trade is still high and the realization of international commodity prices. However, the influence of global economic growth expected to decline began to be felt in Indonesia's export performance.On the other hand, consumption remains strong line of consumer confidence and improved performance of government spending. Meanwhile, investment is expected to increase perkemabangan supported by the development of infrastructure projects and government policies support investment.By sector, contributing to economic growth still comes from trade, hotels and restaurants, transport and industry.