ID :
59097
Tue, 05/05/2009 - 20:29
Auther :
Shortlink :
https://www.oananews.org//node/59097
The shortlink copeid
BI RATE CUT CREATES POSITIVE SENTIMENT IN MARKET
Jakarta, May 5 (ANTARA) - The decision on Tuesday of Bank Indonesia (BI) to cut its BI Rate by 0.25 basis points to 7.25 percent will give a positive sentiment to the market, economic analyst Ryan Kiryantono said.
"The BI benchmark rate reduction will give a positive sentiment to the stock exchange and money market because it is predicted it would lead to the lowering of banks' lending interest rates as expected by the business world," he said here on Tuesday.
He said that the interest rate cut was in line with the present improving macro-economic conditions where the stocks market was gaining strength while the rupiah currency was appreciating to below Rp10,500 per US dollar.
Inflationary pressure is also slackening where in April the country experienced a deflation of 0.31 percent and its foreign exchange reserves had also increased by 1.85 billion dollars to 56.67 billion dollars.
In the meantime, factors that affected inflation have also reduced their pressures, such as the low world crude price at 48 dollars per barrel, the grand harvest and the decline in imports. All this has helped the lowering of the BI benchmark rate.
"If in months ahead inflation remains low, BI will have a big chance to lower its rate to seven percent later this year," he said.
Since December 2008, the BI rate has been cut by 2.25 basis points to 7.5 percent.
The BI rate cut this month by 0.25 basis has previously been predicted by several analysts after seeing the downward trend of inflation.
The Central Board of Statistics announced recently that Indonesia experienced a deflation rate of 0.31 percent in April 2009, where based on the calendar year (January-April) it was noted at 0.05 percent. Inflation based on the annual basis reached 7.31 percent.***2***
"The BI benchmark rate reduction will give a positive sentiment to the stock exchange and money market because it is predicted it would lead to the lowering of banks' lending interest rates as expected by the business world," he said here on Tuesday.
He said that the interest rate cut was in line with the present improving macro-economic conditions where the stocks market was gaining strength while the rupiah currency was appreciating to below Rp10,500 per US dollar.
Inflationary pressure is also slackening where in April the country experienced a deflation of 0.31 percent and its foreign exchange reserves had also increased by 1.85 billion dollars to 56.67 billion dollars.
In the meantime, factors that affected inflation have also reduced their pressures, such as the low world crude price at 48 dollars per barrel, the grand harvest and the decline in imports. All this has helped the lowering of the BI benchmark rate.
"If in months ahead inflation remains low, BI will have a big chance to lower its rate to seven percent later this year," he said.
Since December 2008, the BI rate has been cut by 2.25 basis points to 7.5 percent.
The BI rate cut this month by 0.25 basis has previously been predicted by several analysts after seeing the downward trend of inflation.
The Central Board of Statistics announced recently that Indonesia experienced a deflation rate of 0.31 percent in April 2009, where based on the calendar year (January-April) it was noted at 0.05 percent. Inflation based on the annual basis reached 7.31 percent.***2***
