President Wants BI Rate to be Cut Again
Wednesday, 03 January, 2007 | 14:53 WIB

TEMPO Interactive, Jakarta: President Susilo Bambang Yudhoyono has said he hopes that the Bank Indonesia (BI) Rate keeps decreasing this year.

Today, the BI Rate stands at 9.75 percent.

According to the President, entrepreneurs expect more BI Rate cuts since the lower rates have the potential to encourage the banking sector to reduce commercial interest rates.

With the lower interest rates, the real sector can start to be stimulated so that finally it may alleviate the unemployment and poverty rates.

“If business grows, I will be excited because people will also be able to work again,” said Yudhoyono when opening trading at the Jakarta Stock Exchange (JSX) yesterday (01/02).

The President also said he was convinced that the macroeconomic situation was back to normal, as signaled by the stable Rupiah exchange rate of around Rp8,900 against the US dollar.

The government's debt ratio in 2006 also improved to a level of 40 percent.

Now that the macroeconomic situation is back on the track, said Yudhoyono, now it is time to improve the real sector.

According to him, continuity in the macroeconomic and real sectors was required to relieve the unemployment rate.

Currently, the unemployment rate is around 10 percent.

“Maybe this is too high. I hope that it can reach 5 to 6 percent,” said the President.

BI Governor Burhanuddin Abdullah refused to comment on the President's wish to cut the BI Rate.

“We will see,” he said yesterday in Jakarta.

Yuliawati