ID :
39451
Thu, 01/08/2009 - 00:34
Auther :
Shortlink :
https://www.oananews.org//node/39451
The shortlink copeid
BI RATE MAY DECREASE FURTHER: OBSERVER
Jakarta, Jan 7 (ANTARA) - The Bank Indonesia (BI or central bank) reference rate (BI Rate) may well undergo another cut in light of the Central Bureau of Statistics (BPS) report that the economy experienced a deflation of 0.03 percent in December 2008, an economic observer said.
"The drop in the inflation rate in December 2008 could lead the BI Rate to be lowered by a minimum of 25 points," Rully Nova, an economic analyst with PT Bank Himpunan Saudara Tbk said here Wednesday.
When the BI Rate continued to decline, commercial interest rates in the market would go down as well, he added.
Commercial banks had so far not lowered their interest rates because they were waiting for market developments which until now were marked by a downturn in customers' applications for credit, he said.
But in Nova's view, a BI rate reduction from 9.20 percent at present to nine percent would not be enough to move the industrial sector. To propel the industrial sector, the BI Rate should be lowered to and remain at eight percent.
Sustained efforts would be needed to make such a BI Rate cut possible, he said.
However, Nova further said, a revival in the industrial sector would not be accompanied by a proportionate surge in the investment sector which in fact would decline due to the present global crisis.
"We predict the national economy will grow well and eventually enable the rupiah to strengthen to Rp10,000 from Rp10,800 per US dollar now," Nova said.
The rupiah's exchange rate would continue to improve if BI supervised the foreign currency dealings of foreign banks more tightly.
Another positive factor was the government's effort to stimulate national economic growth by allocating Rp50 trillion from the state budget for small- and medium-scale enterprises.
"The drop in the inflation rate in December 2008 could lead the BI Rate to be lowered by a minimum of 25 points," Rully Nova, an economic analyst with PT Bank Himpunan Saudara Tbk said here Wednesday.
When the BI Rate continued to decline, commercial interest rates in the market would go down as well, he added.
Commercial banks had so far not lowered their interest rates because they were waiting for market developments which until now were marked by a downturn in customers' applications for credit, he said.
But in Nova's view, a BI rate reduction from 9.20 percent at present to nine percent would not be enough to move the industrial sector. To propel the industrial sector, the BI Rate should be lowered to and remain at eight percent.
Sustained efforts would be needed to make such a BI Rate cut possible, he said.
However, Nova further said, a revival in the industrial sector would not be accompanied by a proportionate surge in the investment sector which in fact would decline due to the present global crisis.
"We predict the national economy will grow well and eventually enable the rupiah to strengthen to Rp10,000 from Rp10,800 per US dollar now," Nova said.
The rupiah's exchange rate would continue to improve if BI supervised the foreign currency dealings of foreign banks more tightly.
Another positive factor was the government's effort to stimulate national economic growth by allocating Rp50 trillion from the state budget for small- and medium-scale enterprises.
