With the decision, the range of interest for Bank Indonesia monetary operations would be 3.75 percent for the deposit facility rate and 6.5 percent for the lending facility rate, Bank Indonesia spokesman Difi A Johansyah said.
Jakarta (ANTARA News) - The central bank lowered its reference rate, the BI Rate, by 25 basis points from 6.0 to 5.75 percent on Thursday.

Bank Indonesia spokesman Difi A Johansyah said the decision was taken because inflation continues to drop, while the economy is growing stronger.

"Indonesia`s economy remains strong, although its growth is slowing. In the first quarter of 2012 the economy is projected to grow 6.5 percent. Overall in 2012, the growth tends to reach the lowest end at 6.3 percent, while inflation continues to decline," he said.

He noted that the board of governors said during the meeting that the decision was taken to stimulate growth in the midst of the global economic slowdown by continuing to prioritize inflation targets and the stability of the rupiah exchange rate.

With the decision, the range of interest for Bank Indonesia monetary operations would be 3.75 percent for the deposit facility rate and 6.5 percent for the lending facility rate, he said.

In the immediate future, Bank Indonesia would continue watching for possible risks of a worsening global economy and the impact of the government`s policy in energy, and would continue strengthening the combination of monetary and macro-prudential policies, as well as policy coordination with the government.

The board of governors believed the implementation of a counter-cyclical combination of monetary and macro-prudential policies was needed for the management of the macro-economy overall, and for bringing the rate of inflation to meet the target set at 3.5 percent to 5.5 percent in 2012 and in 2013, he said.

He added that the board of governors is closely monitoring the prospects of the world economic slowdown in line with the continuing economic crisis in Europe and an economic slowdown in emerging markets.

The world economic growth in 2012 is predicted at 3.3 percent, or lower than the earlier prediction of 3.7 percent.

The settlement of the debt crisis among the European countries and fiscal deficit problems would still take time to cause uncertainty, while the US economy's recovery remains weak.

The situation has made global trade decline and affected economic performance in emerging markets, including Indonesia.

In line with the slowing down of world economic activities, global non-energy commodity prices tend to go down, accompanied by a decline in global inflation pressures, he said.(*)

Editor: Heru Purwanto
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