Jakarta - Indonesia's central bank raised its benchmark interest rate 25 basis points to 9.50 per cent on Tuesday, signalling its commitment to fight inflation at the risk of slower growth, officials said.
Bank Indonesia Governor Boediono told reporters that the key rate was increased to suit high inflation and to anticipate the global financial crisis.
Inflation soared to 12.14 per cent year-on-year in September from 11.85 per cent in August, driven by resilient domestic demand and higher global commodity and fuel prices.
Indonesia's stock index plunged 10.02 per cent on Monday amid the global credit crisis. On Tuesday, the Indonesian composite index was down 1.76 per cent.