Indonesia cbank holds rate at 6.5 pct as expected

Wed Jan 5, 2011 2:13am EST 

 JAKARTA, Jan 5 (Reuters) - Indonesia's central bank kept 
its benchmark interest rate at a record low 6.5 percent on 
Wednesday, as expected, and said it will coordinate with the 
country's government to curb inflationary pressures that it 
sees rising.	
 	

 KEY DATA:	
 Announcement date        Rate (percent)	
 ---------------------------------------	
 05-Jan-2010              6.50	
 03-Dec-2010              6.50	
 04-Nov-2010              6.50	
 05-Oct-2010              6.50	
 03-Sept-2010             6.50	
 04-Aug-2010              6.50	
 05-July-2010             6.50	
 03-June-2010             6.50	
 05-May-2010              6.50	
 06-April-2010            6.50	
 04-March-2010            6.50	
 04-Feb-2010              6.50	
 06-Jan-2010              6.50	
 03-Dec-2009              6.50	
 04-Nov-2009              6.50	
 05-Oct-2009              6.50	
 03-Sept-2009             6.50	
 05-Aug-2009              6.50	
 03-July-2009             6.75	
 03-June-2009             7.00	
 05-May-2009              7.25	
 03-April-2009            7.50	
 04-March-2009            7.75	
 04-Feb-2009              8.25	
 07-Jan-2009              8.75	
 	

 CONTEXT:	
 Bank Indonesia officials have repeatedly raised concerns 
over surging foreign capital inflows that have been pushing up 
the local currency rupiah , leading them to opt for 
other monetary measures rather than hiking the central bank's 
policy rate from a record low 6.5 percent.	
 Deputy governor Hartadi A. Sarwono told Reuters in an 
interview last month the central bank would not hesitate to 
tighten policy through a rate hike or another measure if core 
inflation rose close to 5 percent.	
 December's annual inflation was at a 20-month high of 6.96 
percent, far above the the central bank's target range of 4-6 
percent. But December's core inflation was relatively stable 
at 4.28 percent year-on-year.	
 Analysts polled by Reuters expect Bank Indonesia to start 
hiking its rate towards the end of the first quarter of 2011 
or in the second quarter.	
 The central bank has normalised stimulus measures taken 
during the 2008 financial crisis to absorb excess liqudity in 
the financial system that can build up core inflation. It 
announced last month higher minimum dollar reserve 
requirements for commercial banks and a limit for their 
short-term foreign borrowings. [ID:nL3E6NT0DT]	
    The central bank may hold its benchmark rate for as 
long as possible to help support an economy it sees growing by 
6.3 percent this year after an estimated 6 percent in 2010.	
 Bank Indonesia cut its policy rate by a total 3 percentage 
points between December 2008 and August 2009 to shield the 
economy from the financial crisis, and has left it at 6.5 
percent since then.	
 	

 LINKS:	
 - BI rate details .......................... 
 - Central bank website ............... www.bi.go.id	
	
 (Reporting by Aditya Suharmoko, Adriana Nina Kusuma and Rieka 
Rahadiana; Editing by Neil Chatterjee)
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