The Bank of Indonesia, the country's central bank, increased its interest rate by 25 basis point to 8.75 percent to cope with the high inflation pressure, the governor of the bank Boediono said here on Thursday.
The governor said that the decision was taken by considering the risk on the economic and financial stability, and the prospect of economic growth this year and next year.
"We take the decision after closely monitoring and considering the stability of the Indonesian economic and financial sector as well as the prospect of economic growth this year and the next year," he told reporters at his office.
Previously, the bank raised the rate to 8.50 percent in June this year.
The soaring global oil and food prices, which have started to rise since the beginning of this year, have put pressure on inflation in Indonesia.
The government raised oil prices by an average of 27.8 percent in May.
The government revised up the inflation target from 6.6 percent to 9.5 percent this year and trimmed its economic target from 6.8 percent to 6.0 percent.
Source: Xinhua
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