BI SEES NO URGENCY TO CHANGE BENCHMARK RATE

Jakarta, March 22 (ANTARA) - Bank Indonesia (the central bank/BI) still sees no urgency to change its benchmark interest rate or BI Rate which now stands at 6.5 percent, its acting governor said.

"We still see no urgency to review the BI Rate," Darmin Nasution said after attending a coordination meeting at the Coordinating Ministry for Economic Affairs here on Monday.

Darmin said Bank Indonesia would not follow central banks of other countries such as India to change its benchmark rate.

"We have own considerations based on our own conditions," he said.

Up till now the inflation target was still manageable thanks to the low monthly inflation rates in January and February and the likelihood of deflation in March, he said.

The Central Statistics Agency (BPS) said early this month the country recorded a monthly inflation of 0.30 percent in February, bringing the inflation in calendar year to 1.14 percent and year-on-year inflation to 3.81 percent.

Compared to January, the monthly inflation in February was relatively low.
"We predict the inflation rate this year will be on the expected track. If there is inflation it will be very low," Darmin said.

BI has maintained its benchmark rate at 6.5 percent since August last year.

Meanwhile, Coordinating Minister for Economic Affairs Hatta Rajasa called on domestic banks to lower their lending rates to boost the real sector.

(S012/H-GN )