BII RATE STILL MAINTAINED AT 5.75%

Meeting of the Board of Governors of Bank Indonesia on Thursday [7/3] decided to still maintain BI rate at 5.75% to synchronize with inflation target of 2013 – 2014 at 4% plus-minus 1%. Indonesia’s economic performance was still satisfactory in spite of tendency of moderation in investment flow since quarter IV 2012. Bank Indonesia would keep watch on inflation course especially those based on food price. The monetary and macro-prudential policy mix and sound coordinating steps with the Government, would help to control inflation toward external balance for a sustainable economic growth.

               

BI projected that Indonesia’s economy in quarter I 2013 would grow at the expected 6.2%, especially supported by strong domestic demand. Consumption had been growing well in line with consumers confidence and people’ increasing purchasing power. Various indicators showed signs of moderated investment growth particularly in non-physical developments amidst notable physical developments. The sign of moderation was also visible in cooling down of import craze, especially import of capitals goods. Indonesia’s export performance to various main trading partners like China, the USA and India were projected to progress well.

               

Deficit in current transaction was projected to lessen in Quarter I 2013, supported by ever growing export. Meanwhile, import of non oil-gas commodities tend to ease. Capital inflow in the form of FDI or portfolio investment was expected to be reasonably high. Forex reserves up to end of February 2013 was posted at USD 105 billion or equal to 5.7 months of import and payment of Government’s overseas debts.

               

Inflation pressures or administered prices which were notably high was on account of increased electricity price [TTL] which was estimated to ease down in line with the coming harvest. In the future Bank Indonesia would foster coordination through the inflation controlling Team [TPI] forum and the Regional Inflation Controlling Team [TPID] to secure supply and distribution of goods. (SS)  

Business News - March 13,2013