BI's policy remains accommodative to boost economic growth: Governor

BI's policy remains accommodative to boost economic growth: Governor

The Board of Governors of Bank Indonesia in Jakarta, Thursday (1/23/2020). (Antara/Indra Arief/AK).

the most decisive factor for options in providing stimulus to the economy is their effectiveness
Jakarta (ANTARA) - Bank Indonesia (BI) Governor Perry Warjiyo affirmed that the central bank's policy will remain accommodative to strengthen the economic growth momentum and space to lower interest rates.

At a press conference during the BI Board of Governors' Meeting in Jakarta on Thursday, Warjiyo will consider utilizing the option of reducing the benchmark interest rate or providing stimulus to the economy, with the option of re-injecting liquidity and monetary operations.

The BI governor opined that the most decisive factor for options in providing stimulus to the economy is their effectiveness.

"There is room for a rate cut, but will it be used? Wait a minute. We consider global and domestic factors," Warjiyo stated.

In January 2020, BI has opted to hold the 7-Day Reverse Repo Rate at five percent while also maintaining the deposit facility rate at 4.25 percent and lending facility rate at 5.75 percent.

BI took the decision to hold the benchmark interest rate at the start of 2020 since the central bank saw the prospect of a global economic recovery that can ease uncertainty.

The recovery in uncertainty was owing to economic growth in several countries and positive prospects in the manufacturing industry in the world, he noted.

The decision to maintain interest rates also takes into account the domestic economic conditions, including projected sustained economic growth backed by exports owing to requests from several trading partner countries.

It is also supported by household consumption and investment, particularly in the manufacturing sector, Warjiyo stated.

The monetary authority estimates economic growth to reach 5.1-5.5 percent in 2020. In the third quarter of 2019, economic growth was recorded at 5.02 percent.

BI projects the current account deficit in 2019 to account for 2.7 percent of the GDP.

The current account deficit will continue to be in control to lie between 2.5 percent and three percent in 2020. Related news: Trade balance may potentially swing to surplus in 2020: BI

Related news: US-Iran conflict has short-term effect on Indonesian economy: BI


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