Forecasting economic growth, Indonesia keeps BI interest rate at 6½%

By Richard Connell

New York, April 6 - The Board of Governors of Bank Indonesia kept the BI rate at 6½% at its meeting on Tuesday, according to a news release issued by the bank.

The board stated that the performance of the domestic economy improved in the first quarter of 2010, led by increases in exports of both commodities and manufactured products.

Inflation in Indonesia declined by 0.14% in March, bringing annual CPI inflation to 3.43% on a year-over-year basis, well below the target range of 5% plus or minus 1%.

Looking forward, the board anticipates the economic recovery continuing, revising upwards its forecast for economic growth in 2010 to the 5½% to 6% range.

Deeming the current BI rate at a level consistent with achieving the inflation target through 2011 while remaining conducive to boosting the economy, the board left the rate unchanged at 6½%.

The board has now left the rate unchanged at eight straight meetings.

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