"The central bank has predicted that inflation will remain within the targeted range of 3.5 to 5.5 percent in 2012 and 2013," said Dody Budi Waluyo, the executive director of the bank`s strategic planning and public relations department.
Jakarta (ANTARA News) - Bank Indonesia (BI) decided on Thursday to keep its key interest rate unchanged at 5.75 percent in light of low inflation.

"The central bank has predicted that inflation will remain within the targeted range of 3.5 to 5.5 percent in 2012 and 2013," said Dody Budi Waluyo, the executive director of the bank`s strategic planning and public relations department, after attending a meeting of the bank`s board of governors.

"As projected earlier, the third quarter of 2012 saw a reduction in current account deficit. Yet the central bank will keep watching out for external pressures on the current account, particularly those coming from the worsening global economic environment," he added.

Dody said BI would continue to evaluate the impact of its previous policies and, if necessary, take remedial action.

"Bank Indonesia will also step up coordination with the government in order to ensure that its policies help stabilize the macroeconomy and promote sustainable national economic growth," he added.

"The board of governors is of the view that domestic economic performance is still consistent with the nation`s economic capacity, which is supported by high consumption and investment. Domestic consumption continues to grow at a high rate thanks to the public`s confidence in the country`s economic prospects and manageable inflation," Dody explained.

"Investment also remains strong, fueled by the business world`s rising confidence in Indonesia`s economic prospects, with most of the investment coming from banking loans and foreign direct investment," he stated.

Dody said the central bank predicted that exports would continue to grow, although at a slower rate, in light of improvement in the economic condition of many countries that were Indonesia`s major trading partners.

However, he added, the possibility of a global economic meltdown continued to cast a cloud over the country's future prospects.(*)

Editor: Heru Purwanto
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