Director of Economic Research and Monetary Policy Bank Indonesia, Darsono, said here on Thursday that the possibility of the inflation is below five per cent, and there is no constraints from the food security.
"We believe that the 2011 inflation will subside, even the central bank targeted is 4.5 percent in 2012," he said.
On the BI rate reduction, there are various measures of adjustments by the banking industry which is estimated to take about two to three months.
"We can see the follow up later, in the mean time the deposit rate will follow," he said.
Standard Chartered Bank`s economic chief Fauzi said that by the end of this year Bank Indonesia is predicted to lower the BI rate to six percent.
"This was done to anticipate the impact of global crisis which is feared to affect economic growth in Indonesia," he said.
Fauzi said that the BI rate reduction by 25 basis points several time ago does not influence investment too much.
(SYS/A050/O001)
Editor: Suryanto
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