Bank Indonesia

June 18, 2015

The released statement following this month’s Board of Governors’ meeting expresses satisfaction with the current monetary policy stance, anchored since February by a BI interest rate of 7.50%.  Officials at the central bank believe the current interest rate structure meets their policy priorities:

The decision is congruous with efforts to control inflation within the target corridor of 4±1% in 2015 and 2016 as well as manage the current account deficit at a healthier level in the range of 2.5-3.0% of GDP in the medium term. The BI policy mix remains focused on maintaining macroeconomic stability against a backdrop of global economic uncertainty as well as maintaining economic momentum by loosening macroprudential policy.

At the moment, CPI inflation is running at 7.15%, above target, and GDP growth of 4.7% in the year through the first quarter of 2015 was disappointingly low.  However, core inflation is below total inflation, which also reflects some transitory forces, and expected inflation remains anchored.  Faster economic growth is predicted in the second half of this calendar year.

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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