Indonesia's LPS Cuts Rupiah, Dollar Deposit Rates

Source: Reuters (11-01-2009)

JAKARTA, Jan 12 - Indonesia's state-owned deposit insurance corporation cut its maximum guaranteed rupiah deposit rates by 50 basis points to 9.5 percent, the agency said on Monday.

It also cut its guaranteed dollar deposit rates by 50 basis points to 3.0 percent. Both cuts will come into effect on Jan. 15.

Firdaus Djaelani, director at the agency, said the cuts reflected an easing of inflationary pressures due to lower subsidised fuel prices and the central bank's decision to cut its key interest rate <BIPG> to 8.75 percent.

Bank Indonesia has cut its key rate twice since early December by a total of 75 basis points. The government on Monday announced its third fuel price cut in six weeks.

"In general, liquidity in the banking system has started to improve," he added. (Reporting by Dicky Kristanto and Andreas Ismar; Editing by Sara Webb, John Stonestreet)