Jakarta (ANTARA News) - Bank Indonesia (BI)`s policy to keep its BI Rate at 6.5 percent flat for the 14th consecutive time is deemed to have spurred investors, especially foreign ones, to be more active at the Jakarta Stock Exchange.

"BI has maintained its rate at the 6.5 percent level and this has prompted investors, especially foreign ones, to be more active in both the stock and financial markets," said Edwin Sinaga, a stock market analyst and president director of Jakarta-based PT Finan Corpindo Nusa, Monday.

Sinaga said BI`s policy on reference rate had been impacting positively and had fueled brisk trading in the markets.

Investors were now n seeking blue-chip and second-tier stocks so that the Jakarta composite index soared beyond 3,200 points to nearly 3,300 points, he said.

During trading in the day, the index once went down below 3,100 points though it soon rebounded due to the positive drives from regional markets, he added.

Dyah N.K. Makhijani, director of BI`s public relations bureau, said in a media sheet that the Board of Governors` Meeting convened on September 3, 2010, BI had decided to hold the BI Rate at 6.5 percent.

However, in view of the potential for future inflationary pressures and the considerable excess liquidity in the banking system, the Board of Governors stressed the importance of raising the Primary Statutory Reserve Requirement from 5% to 8% of banks` third party rupiah deposits.

This policy combination was considered adequate to safeguard monetary stability and financial system stability amid the present high rate of capital inflows, Makhijani said.
(KR.VFT/HAJM/A014/P003)

Editor: Priyambodo RH
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