=DJ UPDATE: Bank Indonesia Governor: Room Remains For Rate Cuts
(Adds comments from central bank official, finance minister)
JAKARTA (Dow Jones)--Room remains for further cuts to Indonesian interest
rates, Bank Indonesia's governor said Tuesday after the central bank left its
benchmark one-month rate unchanged.
The current downturn in global financial markets is likely temporary in
nature, said Bank Indonesia Governor Burhanuddin Abdullah. He added that
Indonesia's economic fundamentals remain strong.
Bank Indonesia kept the one-month policy rate steady at 8.25% in its monthly
policy meeting Tuesday.
"If we look domestically, there is nothing that needs to be a cause for
concern because fundamentally economic growth is still on track. What we have
to do is keep focussed on our targets," Abdullah said.
The government targets economic growth of 6.3% this year.
Finance Minister Sri Mulyani Indrawati said separately Tuesday that the
government supports Bank Indonesia's decision to keep the rate unchanged. The
government maintains an official stance of supporting monetary loosening to
spur growth.
"So far we've been trying with Bank Indonesia to give policy signals that are
consistent so the market's expectations aren't too uncertain and so there is a
definite direction evident in (monetary) policy," Mulyani said. "Looking at the
situation of the market, and economic factors affecting the rupiah ... Bank
Indonesia makes decisions based on the situation today and expectations going
forward, and we respect that," she said.
The dollar closed at IDR9,335 Tuesday. Two weeks ago, the dollar was trading
around IDR9,075 and found resistance at IDR9,100.
-By Jakarta bureau, Dow Jones Newswires; 62 21 3983 1277; [EMAIL PROTECTED]
-Edited by Roger Ng
(END) Dow Jones Newswires
August 07, 2007 07:07 ET (11:07 GMT)
Copyright (c) 2007 Dow Jones & Company, Inc.- - 07 07 AM EDT 08-07-07
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