The report said that by reducing its deficit, Washington would reduce domestic consumption and thus inflation, thereby allowing interest rates to come down.

Indonesian stocks rose on hopes that last week's deregulation package might allow interest rates to come down faster than expected.

But then the Federal Reserve allowed interest rates to fall.

"That sort of signal would allow long-term interest rates to come down a bit."

The dollar has declined steadily for three weeks since the Administration decided to allow the currency's value, and interest rates, to drop.

Some analysts say this weakness should prompt the Federal Reserve to allow interest rates to fall in a matter of days.

The Government has allowed interest rates to rise so high as part of its strategy to keep the currency stable.

This would allow interest rates to fall and add to the amount of savings available for private investment, he said.

The market sees news of a sluggish economy as a sign that inflation will remain under control, allowing lower interest rates.

They also promoted allowing interest rates to rise, to encourage domestic savings and expand the amount of resources available to fund new businesses.