BI Senior Deputy Governor Mirza Adityaswara said the central bank could not yet cut the BI rate to follow the US and the European Central Banks in order to boost economic growth.
"As what we need is the availability of foreign exchange. Around 37 percent of the state bonds are in foreign exchange. It is important to keep foreign exchange to finance the state budget. We have to see to it that there is no capital outflow," Mirza said in a seminar here on Thursday.
Mirza said currently it is impossible for the nation to grow with foreign assistance in capital. Therefore, there should be policy directed to freeing Indonesia from dependence on foreign capital.
"Concerning portfolio investment, we have to increase pension fund, insurance and mutual fund," he added.
He also said that equity and loans should be proportional in foreign investment (PMA) entering the country , adding many PMA companies pay high interest rate to banks abroad.
"We should invite only PMA with equity and borrowing balanced. Therefore, capital structure of PMA also need improvement. The policies have to be directed that way," he said.
The monthly meeting of the BI board of governors on Tuesday decided to maintain the BI rate at 7.5 percent with deposit interest rate at 5.5 percent and landing rate at 8 percent.
The central bank, however, decided to reduce the primary minimum reserve requirement (GWM) in rupiah from originally 8 percent to 7.5 percent of the third party fund effective as from December 1, 2015.
"Yesterday we relaxed monetary policy by reducing GWM. a monetary instrument which is also used by the central banks of many other countries," Mirza said.(*)
Editor: Heru Purwanto
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