JAKARTA ~ Bank Indonesia (BI), the central bank, cut its benchmark interest rate by 25 basis points to 8.75 percent this week amid an easing in the April inflation rate.

A BI official said a stable rupiah and confidence its inflation targets could be met also led the bank to cut the rate.

“After considering the inflation rate trend, risks that the economy may face and evaluating the economic growth prospects, Bank Indonesia decided to cut its rate by 25 basis points,” spokesman Budi Mulya told reporters on Tuesday.

The cut was in line with expectations and comes after the bank left its benchmark rate at 9 percent in April.

The bank had previously lowered interest rates steadily from 12.75 percent in May 2006.

The central bank’s inflation target for this year is 5-7 percent and 4-6 percent in 2008.

Indonesian inflation ran at 6.29 percent in April, easing from a 6.52 percent year-on-year rate in March.