The Indonesian central bank said Friday it may further cut the benchmark interest rate to 10 percent by the end of the year.

Earlier this week, Bank Indonesia cut the interest rate by 50 basis points to 11.25 percent.

"We are confident that, between now and the end of the year, the inflation will be contained below 7 percent and Bank Indonesia interest rate will move to 10 percent," Bank Indonesia deputy governor Aslim Tadjuddin told reporters here.

The decision to cut the so-called BI Rate is based on the tame inflation and the reduced external pressures from fluctuating rate of the U.S. Federal Reserve.

"If we can maintain this improved condition, we will consider further cuts in the future," he said.

"Under this good condition, I believe the rupiah (exchange rate) will hover around 9,000 (against the U.S. dollar) by the end of the year, or possibly stronger than that."

Tadjuddin said the foreign exchange reserves in the central bank reached 42.2 billion dollars at the meantime and might grow to 43 billion in the end of the year.

High international reserves would allow Indonesia to repay the remaining debts of 3.74 billion dollars taken from the International Monetary Fund before new year, he said.

Source: Xinhua