JAKARTA - INDONESIA'S central bank raised its benchmark interest rate 25 basis points to 9.50 per cent on Tuesday, signalling its commitment to fight inflation at the risk of slower growth, officials said.

The move would also bolster the rupiah, which fell to 9,740 against the dollar in early trade on Tuesday, its lowest level since January 2006, before recouping some losses to 9,640 on suspected bank intervention.

Bank Indonesia Governor Boediono told Dow Jones Newswires he remained 'alert but not worried' over the rupiah's weakness.

Inflation soared to 12.14 per cent year-on-year in September from 11.85 per cent in August, driven by resilient domestic demand and higher global commodity and fuel prices.

The central bank has raised its benchmark rate 150 basis points since May, when the government hiked the price of subsidised fuel by around 30 per cent. -- AFP