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BI rate defend on The Fed rate

The inflation rate currently, especially for September - October 2007 are still high, cause of that, until now the Central Bank of Indonesia (BI) has still hold on decreasing of the interest rate till the next month (November 2007).

The Central Bank was estimate that the inflation will not influence significantly on the next of November 2007, and of course this condition will making out the BI rate have an opportunities to decrease again till 25 basis point become to 8 percent. 

If the next October 2007, The Fed decreasing again their interest rate till 25 basis point from 4.75 percent become to 4.50 percent, the BI rate maybe will follow to decreasing again the interest become to 7.75 percent, and so on the interest rate differential will become to 3,25 percent (www.antara.co.id).

Normally, the interest rate difference about 3,25 percent will influence to bringing up the foreign investor for coming up and invest their money in our country and go for buying the investation instrument like SBI and SUN who issued by the government. If this condition will done, of course we still having a new problem with the increasing of cost moneter.   

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