REPUBLIKA.CO.ID, JAKARTA -- Bank Indonesia said monetary relaxation still is possible after a cut in its benchmark interest rate (BI rate) to 7.25 percent from 7.5 percent.

Executive Director of the central bank Juda Agung said the country's economic fundamentals until January 2016 reflected economic recovery was progressing, and at the same time there was less external pressure.

Bank Indonesia has detected signs of improvement since December, 2015. The macro economic indicators improved as indicated by the inflation which was within target.

The BI rate was cut after it remained unchanged for 11 months at 7.5 percent.

"We will see the condition in the coming months if the condition allow further cut in the BI rate," Juda said.

The cut in the BI rate was made at the same time with the cut in lending facility to 7.75 percent and deposit facility to 5.25 percent, he said.

"We will see the outlook, global economy and domestic economy," he said.

The monetary relaxation was decided at a two-day meeting of the board of governors ending on Thursday.

For the first time government representative Coordinating Minister Darmin Nasution took part in the meeting giving his vew about the country's economic condition, although he had no voting right.

The meeting with Darmin was to discuss monetary and regional economic condition, financial stability, payment system, rupiah management, and integration of government and Bank Indonesia policies.

The pressure on the financial sector has receded after the certainty in the decision of the U.S. central bank, raising its fund rate from 0.25 percent to 0.5 percent.

There is however, still challenge to be faced with the oil price volatility and advanced economic slowdown especially China, the country's largest trading partner.

Juda said in the domestic economy , infrastructure development gave stimulus.

He said despite pressure from imports of capital goods, surplus in capital and financial accounts would reduce deficit in the balance of payments. .

He said positive performance in in the financial system help improve bank capital adequacy ratio to 21.1 percent.

However, a decline was recorded in bank intermediacy function with credits growing only 9.8 percent, the amount of third party funds held by bank growing 7.7 percent and non performing loan ratio at1.3 percent, he said.

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