Credibility, which we have strived painfully to achieve over the years, should not be thrown away merely due to the temptation of temporary benefits. With the above positive developments, Bank Indonesia found the opportunity to gradually reduce the BI Rate during 2006.
Throughout 2006, Bank Indonesia trimmed the BI Rate by 300 basis points, which by end of 2006 was recorded below 2 (two) digits, namely 9.75%. Such reductions were taken to preserve the positive market perceptions and support a more conducive business climate, while safeguarding stability in the financial markets amid capital inflows for portfolio placements.