Wednesday, January 5, 2011

Bank Indonesia Holds Benchmark Interest Rate at 6.5%

Bank Indonesia announced it would hold its key interest rate at 6.5%,
for the 17th month in a row, as expected. This comes as the headline
inflation rate creeps further above the target band of 4%-6%. The bank
noted much of the inflation pressure is coming from food price
volatility. The Bank is likely to hold the rate for as long as it can
in order to support growth (forecast at about 6% in 2010), but will no
doubt be watching core inflation very closely.


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