REPUBLIKA.CO.ID, JAKARTA -- Vice President Jusuf Kalla has hinted that Bank Indonesia (BI) will cut its benchmark interest rate again, which is known as the BI Rate, in August 2016.

"God willing, it (BI Rate) will be lowered again in August in accordance with the plan we have discussed with BI," Kalla said after breaking the fast along with thousands of orphans at the Jakarta Convention Center here on Thursday.

He predicted that the BI Rate will be lowered to 5 percent in August from the current 6.5 percent.

The decline in BI Rate should draw positive response from national banks looking to improve their competitiveness at a global level, he said.

"We must learn from Thailand. Otherwise, we will continue to lag behind other countries in Asia in terms of the financial system," he said after attending the fast-breaking gathering held by the Association of State-Owned Banks (Himbara).

The Vice President also encouraged Himbara members to enhance their cooperation with other banks to give better services to their customers.

"We must do that in the era of competition. Almost all Malaysian banks are operating here, but our banks have found it hard to enter Malaysia," he said.

BI's Board of Governors had decided in its monthly meeting on June 16 to cut 25 basis points from its benchmark interest rate (BI rate) to 6.5 percent, the Executive Director for Communications of the central bank Tirta Segara said here.

Tirta gave no details, including the reason for cutting the BI rate from 6.75 percent.

Earlier, BI had cut rates in March when they were lowered by 25 basis points from 7 percent.

The central bank has gradually cut its benchmark interest rate from 7.5 percent in December 2015 after long maintaining the level from February that year.

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