Indonesia central bank official says policy rate cannot be cut to 4% if inflation stays at 4%

[JAKARTA] A senior official at Indonesia's central bank on Friday said the bank cannot cut its benchmark interest rate to as low as 4 per cent if annual inflation stays around 4 per cent.

Earlier this week, the government asked Bank Indonesia (BI) to consider cutting its policy rate to 4-5 per cent.

BI expects annual inflation to edge up to 4.38 per cent in February from 4.14 per cent in January, Juda Agung, the central bank's executive director for monetary and economic policy, told reporters on Friday.

He described annual inflation at 4.38 per cent as "low" and that the rate would stay low in March.

REUTERS