JAKARTA (Antara): Bank Indonesia cut Thursday its benchmark rate by 25 basis points to 8.25 percent, citing continuing improvements in the county's macro-economic conditions.

"The decision (to cut the rate) was made following a comprehensive assessment of economic developments and prospects that are showing signs of improvement," Bank Indonesia Governor Burhanuddin Abdullah said after a meeting of the central bank's board of governors.

He said the cut in the key rate, locally known as BI Rate, was also based on the likehood of the country hitting its full-year inflation targets of 6 percent for 2007, and of 5 percent for 2008.

The results of a study conducted by the central bank suggested that inflationary pressure had shown signs of abating in recent months, he said.

"On a yearly basis, the consumer price index inflation and the core inflation rates in the second quarter of 2007 stood at 5.77 percent and 5.4 percent respectively," he said.(***)