Banks still accept 6.75 pct BI key rate

In general the country`s economic conditions at present were still showing a positive trend as shown by a number of economic indicators.

Jakarta (ANTARA News) - Bank Indonesia (BI/the central bank) is of the opinion that banks will still accept a BI benchmark rate which is set at 6.75 percent, a BI director said.

"Banks still can accept a BI reference rate at 6.75 percent," Research and Banking Arrangement Director of Bank Indonesia Wimboh Santoso said here on Thursday.

He said that in general the country`s economic conditions at present were still showing a positive trend as shown by a number of economic indicators.

Wimbon said that BI Rate has gone down from the previous 10 percent to at present 6.75 percent. "Sometime ago, it has to experience an increase because of efforts to control the increasing inflation trend," he said.

In the meantime, the foreign exchange reserves were still in the safe position, namely reaching US$100 billion. The amount is enough to meet the need for imports for seven months.

The inflation rate up to March was 6.65 percent (yoy). BI is optimistic that the inflation target at 5 plus minus one percent in 2011 would be achieved.

BI is also optimistic that economic growth in the 2011 would reach 6.0 to 6.5 percent, he said.

On the occasion Wimboh also said that only 31 of the country`s 121 banks have been floating their shares to the public.

"Initial public offering (IPO) is one of the alternatives to increase capital," Wimboh Santoso, the bank`s director of banking research and control, said here on Thursday.

IPO would also encourage good corporate governance at the banks, he said.

Responding to the plan by a number of regional development banks to go public, he said on average the banks had a capital of Rp896.3 billion.

"This is far below the average capital of national banks which reaches Rp2 trillion," he said.

The amount of loans channeled by the regional development banks grew 21 percent, or lower than the national average of 22.8 percent, he said.(*)

Editor: Heru Purwanto
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