In line with inflation containment efforts, JAKARTA — The Institute of Social, Economics, and Digital or ISED believes that Bank Indonesia’s policy of keeping the BI 7-day reverse repo rate (BI7DRR) at 3.5% is in line with the objective of maintaining inflation, which continues to rise in line with global growth. tendencies.

ISED Economist and Co-Founder and Expert Advisor Ryan Kiryanto believes that Bank Indonesia’s (BI) decision to keep BI’s 7-day reverse repo rate (BI7DRR) at 3 .5% is the right decision. He calls the movement on time, on target and on dose.

According to Ryan, the policy may also be in line with efforts to contain rising inflation. As is known, inflation increased to 4.2% in June 2022, although the government wants to keep inflation at the end of 2022 not exceeding 4%.

“With reference to the objective of maintaining the stability of the rupee and controlling inflation according to the anchor of BI, as well as maintaining the momentum of growth, this decision has been taken. [mempertahankan suku bunga acuan] right,” Ryan said Thursday (7/21/2022).

He felt that BI’s monetary policy stance was still accommodative or pro-growth. BI has chosen a measured policy in the face of external pressures from the impact of the war in Ukraine, the disruption of global supply chains, stagflation and inflation spikes in various parts of the world.

Ryan also believes that the movement of underlying inflation which is still within the central bank, the volatility of the rupee, which he believes is still stable, and the strong foreign exchange reserves are considerations for BI not to change. not the direction of its monetary policy.

“At the same time, the policy positions of central banks in other countries, such as the United States, South Korea, Britain, Australia and Canada, tend to be hawkish or strict, where the benchmark interest rate is raised in line with inflation because of the spirit of stability,” Ryan said.

BI Governor Perry Warjiyo estimates that this year’s national inflation rate could reach 4.5-4.6%. This figure is higher than the previous BI projection, which was 4.2%.

Perry believed the increase in the projection was due to high global commodity prices, both now and in the future. Food and energy commodities are the main drivers of rising inflation globally.

“With the trend of rising global commodity prices, we expect inflation to be above 4.2%, which could reach 4.5-4.6%,” Perry said during the talk. a press conference on the outcome of the BI Board of Governors meeting, Thursday (21/7/2011).2022).

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Robert Butler

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