JAKARTA - The board of governors of Bank Indonesia have decided yesterday that the benchmark interest rate was to be lowered with 25 basis points to 6.50 percent per year. "This decision was made after the board of governors concluded that the declining inflation rate continues in line with the limited domestic demand as well as the expectation of declining inflation," said Bank Indonesia in a statement.
The Indonesian central bank has cut it's interest rates many times since late last year. This year alone the main interest rate has been cut by 300 points already. Bank Indonesia told that it would review the economic situation every month in order to decide about more rate cuts in line with the targeted inflation. For 2010, the bank targets an inflation of just five percent.