Jakarta - Indonesia's central bank cut its benchmark rate for the ninth consecutive month Wednesday, following a further decline in inflation.

Bank Indonesia reduced its policy rate by 25 basis points to 6.50 per cent amid an improving economic outlook, the central bank said in a statement.

The bank has reduced the rate by a total of 3 percentage points since December 2008 in an effort to help bolster the country's economic growth.

Bank Indonesia said that the downwards trend in inflation was likely to continue, which could hint at further easing of rates, adding that the central bank would pay close attention to rising domestic demand and higher global commodity prices that may cause inflation pressures in 2010.

"In this context, monetary policy will be directed to better anticipate the potential inflation increase so that the inflation target of 5 per cent in 2010 can be met," the statement said.

Bank Indonesia said the country's economy growth this year is expected to be at the upper end of a forecast range of 3.5 to 4 per cent. The economy expanded 6.1 per cent in 2008.