BI maintains key rate at 8%

Bank Indonesia decided to maintain its key rate at 8 percent, considering global economic conditions which may raise the fear of high inflation."The decision is very justifiable given inflationary pressures both from external and internal factors due to the global situation," BI Deputy Governor Budi Mulya said when announcing the decision made at a meeting of the bank’s board of governors.He said the Central Bureau of Statistics (BPS) had reported that the on-month inflation rate in January was relatively high. "The on-month inflation rate reached 1.77 percent in January, bringing the year-on-year inflation rate to 7.36 percent."The central bank would also keep monitoring global developments, including the looming US economic recession, global commodity price hikes and financial market turbulences, he said.Despite the pressures, the Indonesian economy would continue to pick up steam, he said. Quoting the results of a study made by the central bank, he said the impact of the global economic slowdown on the Indonesian economy could partly be offset by diversifying the markets of the country’s exports. (http://www.antara.co.id/en/arc/2008/2/6/bi-maintains-key-rate-at-8/)