Bank Indonesia

April 11, 2013

The BI interest rate was held at 5.75%, its level since cuts of 25 basis points in October 2011, 50 basis points in the following month and 25 basis points in February 2012.  That easing more than offset a single post-Great Recession 25-bp hike administered in February 2011.  During the global downturn, 300 bps of ease was implemented with an eventual trough of 6.5% from August 2009 until the sole hike in February 2011.

A statement released by the BI Board today

  • Blamed a spike of CPI inflation from 4.6% in January to 5.9% as of March on food price pressures whose impact will be temporary.
  • Reaffirmed that the present policy stance will deliver in-target medium-term inflation.  The target is a range of 3.5% to 5.5%.
  • Revised projected economic growth downward to 6.2-6.6% this year and 6.6-7.0% in 2014.
  • Said downward pressure on the rupiah is moderating.
  • Promised to “strengthen monetary operations through increasing the absorption of excess liquidity into long-term tenor.”
  • And predicted a smaller current account deficit this quarter. 

The Bank’s Board meets every month.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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