JAKARTA, INDONESIA - Indonesia's central bank Thursday left its benchmark overnight interest rate steady at 6.50 per cent and said it will likely keep it low for the next few months given the benign inflation outlook.

Bank Indonesia (BI) said inflation was on target to meet annual forecasts of four to six per cent and rates would be held in check to maintain liquidity and encourage economic activity.

It said recovery is likely to be stronger than previously thought with household consumption and exports strengthening, but did not specify if its five per cent growth target for this year will be revised.

The bank added that inflationary pressures are likely to remain subdued in the first half of the year, reiterating its view from recent months.

Inflation rose to 3.81 per cent in February compared to 3.72 per cent in January, but it remained below the year-end target.