"There is something positive from the increase in the BI rate resulting in an increase in the BEI index this morning," BEI president Ito Warsito said.Jakarta (ANTARA News) - Indonesia`s benchmark stock index rose in the opening trade on Friday following the rise in Bank Indonesia benchmark interest rate (BI rate).
The Indonesian central bank announced on Thursday an increase in the BI rate to 6 percent after keeping the rate at 5.75 percent for 16 months.
The index of the Indonesian Stock Exchange (BEI) rose 94.80 points or 2.06 percent to 4,702.47 points .
"There is something positive from the increase in the BI rate resulting in an increase in the BEI index this morning," BEI president Ito Warsito said.
The decision of the central bank to raise the BI rate is to keep rupiah stable against the US dollar, Ito said here on Friday.
"Bank Indonesia shows great concern for the stability of domestic exchange rate resulting in significant increase in the BEI index," he said.
Bahana Securities` chief researcher Harry Su said the rise in BI rate is also expected to boost exports and redress the trade balance.
The country has suffered deficit in trade in the past several month with import rising faster than exports.
Meanwhile, continued US slowdown gave rise to optimism that the world largest economy would still continue its program of quantitative easing .
Regional markets such as Hang Seng reported a 0.95 percent gain in index to 21,086.12 points , Nikkei-225 posted a 3.11 percent rise in index to 12,832.30 points and Straits Times` index rose 0.90 percent to 3,158.98 points.(*)
Editor: Heru Purwanto
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