BI holds rate at 6.5 percent

Aditya Suharmoko, The Jakarta Post, Jakarta | Thu, 12/03/2009 2:48 PM

The central bank held its key interest rate at 6.5 percent for the fifth straight month after evaluating the economy so far this year and pointing out economic prospects ahead.

Bank Indonesia said in a statement Thursday the economy would likely expand 4.3 percent this year, and up to between 5 and 5.5 percent in 2010, in line with the global economic recovery.

BI Acting Governor Darmin Nasution said Wednesday the 6.5 percent BI rate was at an appropriate level, considering inflation would likely soar next year to about 5.5 percent. This year's inflation is estimated to reach 3 percent, he added.

In its statement, BI said its fiscal policy would be aimed to keep inflation at a low level while remaining on guard against efforts to derail economic recovery.