REPUBLIKA.CO.ID, JAKARTA - A leading economist said Bank Indonesia has made a right decision in maintaining its benchmark interest rate at 5.75 percent. The Central Bank Board of Governors announced after a meeting earlier today its key interest rate was maintained at 5.75 percent to be consistent with its inflation target of 3.5 percent-5.5 percent this year. 

"With inflation expected to remain under control at a relatively low level in 2013, Bank Indonesia decided to keep the interest rate unchanged," central bank Governor Darmin Nasution said.

According to Lana Soelistianingsih, an economist from Samuel Sekuritas, "Inflation is expected to remain under control in 2013 and many other countries have also made a similar policy."

Lana said rupiah value also could be controlled by withdrawing rupiah from circulation to be invested in Bank Indonesia instruments like Bank Indonesia Certificate and term deposits. She predicted in January, 2013 rupiah investment will be made more in state bonds as banks would be less aggressive in offering credits at the start of a year. She said a healthy economic growth is predicted in 2013 and 2014 with inflation under control as in 2012.

Further, Lana said the policy of the central bank would be focused on managing external balance and rupiah stability. Bank Indonesia was expected to improve coordination with the government in managing domestic demand and maintaining high economic growth, she said.

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