Bank Indonesia maintains reference rate at 6.5%

• Bank Indonesia has decided to maintain the BI rate at 6.5% for the ninth consecutive month. This came as no surprise as market has expected that any rate hikes would start in the 2H10. This was also added by previous remarks made by Acting BI Governor, Mr. Darmin Nasution, who cites that the level could be maintained until the rest of the year.

• Foreign reserves until the end of April 2010 reached US$78.6bn that equals to 6.2x government import needs and debt repayment. Bank credit growth was 14.5% YoY while the banking sector’s CAR is maintained at 9.1%.