(Corrects alert and bullet points to make clear that the
central bank referred to the primary reserve requirement and
that it should be compared to a previous level of 5 pct not 7.5
* C.bank says concerned about rising inflationary pressures
* Raises primary reserve requirement to 8 pct from 5 pct
* Leaves interest rates unchanged at 6.5 pct, as expected
* C.bank sets loans-to-deposit ratio at 78-100 pct
JAKARTA, Sept 3 Indonesia's central bank kept
its interest rate at a record low of 6.5 percent as expected on
Friday but raised its primary bank reserve requirement, saying
it was concerned about rising inflationary pressures.
Announcement date Rate (percent)
- The central bank has consistently said it will leave its
interest rate unchanged all year if inflation meets its
end-2010 target range of 4 percent to 6 percent, as it seeks to
spur bank lending and growth.
- Annual inflation picked up to a 16-month high of 6.44
percent in August, data showed this week. However, the figure
was lower than expected, and all economists polled by Reuters
before the CPI data had predicted Bank Indonesia would leave
rates on hold on Friday.
- Annual inflation in July and August picked up because of
higher electricity tariffs and food prices. Unseasonally heavy
rains in recent weeks have disrupted crop production and
distribution, leading to higher food prices at a time when
demand is particularly strong because of the special meals
prepared to celebrate the end of fasting each day during
Ramadan and the festivities at the end of the fasting month.
- Economists expect the central bank to start bringing
rates back to levels seen before the global financial crisis in
fourth quarter, to head off inflationary pressures later on.
- Bank Indonesia cut its benchmark rate by a total of 3
percentage points between December 2008 and August 2009 to
shield the economy from the global financial crisis, and has
left the rate at a record-low 6.5 percent since then.
- BI rate details.....BIPG
- Central bank website.........www.bi.go.id
(Editing by Neil Fullick)