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Bank Indonesia Holds Interest Rate Unchanged at 6.75%

|Includes:iShares MSCI Indonesia ETF (EIDO), IDX, IF

 Indonesia's central bank, Bank Indonesia, maintained the BI reference rate on hold at 6.75%.  The Bank said: "Bank Indonesia views that the current BI Rate level is still in line with the effort to maintain stronger economic activities supported by stability, amid domestic excess liquidity and continued large capital inflows.  Going forward, Bank Indonesia will closely monitor risks on macroeconomic stability, particularly emanating from capital inflows and global commodity prices.  Meanwhile, inflation is estimated to be under control and could be lower than earlier forecasted if there is no Government policies regarding energy prices while the supply and distribution of basic foods are well maintained."

At its June meeting, the Bank also maintained the key monetary policy rate (the BI Rate) unchanged at 6.75%.  Previously the Bank raised the BI rate by 25 basis points to the current 6.75% in February 2011.  Indonesia reported annual inflation of 5.98% in May, compared to 6.16% in April, and 6.65% in March, and just inside the inflation target of 5% +/-1% in 2011 (which changes to 4.5% +/-1% in 2012).  Bank Indonesia is forecasting GDP growth of 6.3-6.8% in 2011 and 6.4-6.9% in 2012 for the Indonesian economy.

Stocks: EIDO, IDX, IF