The Fed, Bank of Canada, Bank of England, Bank of Japan and European Central Bank and Swiss National Bank had agreed to reduce the US dollar lending rate by 50 basis points.
Nusa Dua, Bali (ANTARA News) - A top Bank Indonesia (BI or central bank) official has welcomed the agreement reached by six advanced country central banks to cut their interest rates on US dollar loans by 50 basis points.

BI Deputy Governor Muliaman D Hadad said here on Thursday the decision of the central banks of six advanced countries had created confidence among market players that there would be a solution to the crisis in Europe and the US.

"The initiative of the six central banks has created some hope. Hopefully this will continue because what they have pledged is real and concrete, including a promise to provide liquidity to help banks there," he said.

The Fed, Bank of Canada, Bank of England, Bank of Japan and European Central Bank and Swiss National Bank had agreed to reduce the US dollar lending rate by 50 basis points.

The six central banks also agreed to jointly help with the liquidity to European banks providing cheaper US dollar funding as of December 5 and to make bilateral agreements for the provision of liquidity in other currencies.

"I think the optimism is bought by the market as shown by latest indexes in the US and Europe which are significantly positive, which will certainly be followed by the world. Hopefully it will last long because it will be followed by policies in Europe especially for settling the crisis there," he said.

Muliaman said Bank Indonesia would continue monitoring closely the developments that happened and wait for the policies that would be produced by European and other countries.

"Certainly we are waiting for what will emerge later but with regard to Indonesia I could say that fundamentals remained good although we have to remain alert and careful," he said.

The indexes in almost all stock exchanges in the world on Thursday showed positive trends including the index of the Indonesian Stock Exchange which strengthened by 90 points or 2.44 percent in the afternoon to 3,805.

A total of 189 stocks in the Indonesia Stock Exchange were up while 30 down and 216 remained unmoved, led by financial and mining sectors.(*)

Editor: Heru Purwanto
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