BI Rate Predicted To Be Maintained Until Q2

Jakarta, Feb 13 (Antara) - Leading economist Aviliani from the EC Think predicted Bank Indonesia (BI) would maintain its relatively high benchmark interest rate (BI rate) of 7.5 percent until the second quarter of this year. "The central bank will likely maintain the BI rate for the first half of the year," Aviliani said here on Thursday. She said inflation in 2014 is expected to be back at its normal trend and the BI`s inflation target of 3.5-5.5 percent could become a reality. In the second half of 2014, she hopes the central bank could cut the BI rate with the certainty that the US central bank would stop financial stimulus. However, she did not rule out the possibility of BI to raise the BI rate in the second half of 2014. At its monthly meeting of the board of governors of Bank Indonesia is expected to announce its decision on the BI rate on Thursday. In its previous monthly meeting, the board of governors decided to maintain the 7.5 percent rate. Earlier, Enny, an observer from the Institute for Development of Economy and Finance (INDEF) said the BI rate is already a bit too high . Enny said there was no reason for BI to continue the policy of high interest rate in its bid to prop up rupiah and to deal with the current account deficit. She noted rupiah has regained strength against the U.S. dollar and the pressure is easing on the currency allowing a cut to the BI rate.