Jakarta - Indonesia's central bank reduced its benchmark interest rate by 25 basis points to 7 per cent Wednesday to help bolster the country's economic growth.

Bank Indonesia's seventh-consecutive monthly cut brought the prime lending rate to its lowest level since 2005.

The bank said inflation at the end of the year would still be in line with earlier estimates of 5 to 7 per cent.

"Bank Indonesia will always be cautious about the potential for inflationary pressure in 2010, together with forecasts of higher world commodities prices," the statement said.

Bank Indonesia forecast the country's economy would grow by 3 to 4 per cent this year. The economy expanded 6.1 per cent in 2008. (dpa)