"In our calculation, it will be corrected slightly from our projection. But it will not much change the medium and long term target," Dody said in a discussion held at the office of the Center for Strategic and International Studies (CSIS) here on Wednesday.
He was responding to views from various circles that the central bank`s step to raise the benchmark rate is not pro-growth.
BI raised its benchmark interest rate twice in May 2018 by 25 basis points each to 4.75 percent.
The central bank last raised the benchmark rate at its extra meeting of the board of governors on May 30 to anticipate external risks particularly the likelihood of the US Federal Reserve raising its interest rate on June 13.
Dody said the rupiah`s depreciation against the dollar will overshoot if BI does not raise its key rate by 50 basis points to 4.75 percent.
With the imports contributing a lot to the economic growth, the shock caused by overshooting will be more significant than interest rate hike as imports and foreign currency-denominated obligations will increase, he said.
(S012/ )
Reporter: Calvin Basuki
Editor: Suharto
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