Related News
Jakarta (ANTARA News) - Bank Indonesia (the central bank/BI) decided Thursday to maintain its benchmark rate at 6.5 percent, citing it is still consistent with the inflation target of 5 plus and minus 1 percent for 2010 and 2011.

The decision was also considered conducive to strengthen economic recovery efforts, keep financial stability and carry out the banking industry`s intermediary function, head of the bank`s public relations bureau Difi A Johansyah said.

The central bank was of the view that the domestic economic recovery process was still underway and tended to run better than expected at the start of this year, he said.

The bank noted that private consumption continued to increase while at the same time exports began to record positive growth in line with the improving prospects for the global economic recovery.

Not only mining and farm products but also manufactured goods had begun to see an increase in their exports, he said.

The export performance had contributed to the higher-than-expected growth of industrial and trade sectors, he said.

The external sector`s good performance was also reflected by a surplus of current transactions in the balance of payment, he said.

The inflow of foreign capital was relatively high as a result of foreign investors` strong confidence in the improving fundamentals of the domestic economy, he said.

By the end of February the country`s foreign exchange reserves reached US$69.7 billion which was enough to finance imports for 5.7 months and repay the government`s foreign debts, he said.

Inflationary pressure in February also showed signs of abating in line with the low inflationary pressure from volatile foods and administered prices, he said.

On-month inflation was recorded at 0.30 percent in February, bringing to 3.81 percent the year-on-year inflation.

The relatively controllable inflation was also reflected by the core inflation which fell to 3.88 percent year-on-year in February from 3.88 percent a month earlier, he said.

Judging by the developments, the central bank believed significant inflationary pressure would not emerge at least until the end of the first semester, he said.
(*)

Editor: Bambang
COPYRIGHT © 2012

Comment
Send Comment