Singapore (ANTARA News) - Indonesia's government sees no further interest rate cuts this year as it watches inflation trends, Trade Minister Mari Pangestu said on Sunday.
Indonesia's central bank left its key interest rate steady earlier this month at 8.25 percent for the fourth month in a row, wary about the inflationary threat posed by rising oil prices, after slashing them by 4.5 percentage points since mid-2006.
Some analysts expect the central bank to cut rates in December to boost economic growth in Southeast Asia's biggest economy.
"Not for the time being. We are keeping a close eye on inflation," Pangestu was quoted by Reuters as telling reporters on the sidelines of a conference in Singapore.
October consumer prices in Indonesia rose 6.88 percent from a year earlier, faster than a 6.80 percent rise forecast by analysts. However, the central bank expects inflation in November to be more subdued than the previous month due to an easing in food price pressure.
Pangestu said economic growth was as projected.
Indonesia's state budget is forecasting growth at 6.3 percent this year, which would be its fastest pace in 11 years, and its 2008 budget sets a growth target of 6.8 percent.
"O7 growth is as projected at 6.8 percent," Pangestu said.
She said the Indonesian government will increase spending on infrastructure projects, and diversify the Indonesian economy to offset possible weakness in exports.
"We will take steps to offset some of the downside risks that we are perceiving in the world markets," Pangestu said.
The head of the Asian Development Bank said on Saturday that turmoil in world financial markets and inflation from high oil and commodities prices were the biggest threats to strong Asian economic growth. (*)
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