BI: BI Increasing Rate Decision Easy Open

Governor of Bank Indonesia Nasution admitted that the decision to raise its benchmark interest rate is not an easy thing. The increase in the BI Rate to 6.75 percent from 6.5percent due to a very real threat of inflation.

So the increase was made ​​after "Looking at inflation continued rising during 2010. Thatis our concern," said Nasution.

Actually, Nasution continued, the pressure to raise interest rates has been felt since last year. Pressure is not coming from analysts but based on real economic pressures. "It'sbeginning to look from currency exchange rates, SBI auction we do and inflation," he explained.

However, BI remains hopeful inflation under control because it is not caused bymonetary inflation. "That's what we think about when setting interest rates announced in January," said Nasution.

But the Central Bank then see any inflationary pressures due to rising energy prices."Because Indonesia is different from other countries where energy prices are controlledby the government," he said.

BI, Nasution said, did not want any increase in interest rates. BI try to spread betweendeposit rates mortgage interest rates not too far away, then the 18-month interest ratesstill remain. Decision of the Central Bank raise interest rates in early February led todeclining inflation.

Board of Governors of Bank Indonesia rate of inflation expectations to rise mainlytriggered by the rising prices are still high volatile foods as well as rising globalcommodity prices including oil and plans of government policy in the field of strategiccommodities.