In the monetary policy, the previous BI Board of Governors Meeting decided to maintain the benchmark interest rate policyJakarta (ANTARA) - Bank Indonesia (BI) Deputy Governor Juda Agung has affirmed that the bank is ready to adjust the benchmark interest rate if there are signs of an increase in core inflation.
BI will be cognizant of the inflationary pressures and their impact on inflation expectations.
"In the monetary policy, the previous BI Board of Governors Meeting decided to maintain the benchmark interest rate policy," Agung stated at the 2022 G20 Indonesia Side Activity titled "Central Bank Policy Mix for Stability and Economic Recovery" in Nusa Dua, Badung, Bali, Wednesday.
Consumer Price Index (CPI) inflation began to rise, driven by pressure from the supply side as a natural outcome of the rising international commodity prices. However, BI is still targeting core inflation of around two to four percent.
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Agung then remarked that volatile price inflation was also increasing, which was mainly influenced by the rising global food prices and constraints on the supply side due to bad weather.
Inflation in government-regulated prices also remained high, influenced by airfare and energy prices.
Agung explained that rising inflation did occur worldwide, with food and energy prices hitting record highs and impacting living standards worldwide.
"Aggressive monetary policy tightening to tackle inflation in several advanced economies has tightened global financial conditions and has fueled recent market volatility," he stated.
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Hence, Agung emphasized that BI will continue to strengthen coordination with the central and regional governments.
BI will also continue to work together with relevant agencies through the Central Inflation Control Team (TPIP) and the Regional Inflation Control Team (TPID) to manage supply-side inflationary pressures and increase production.
In future, the monetary authority will continue to build coordination for monetary and fiscal policies with the government to maintain macroeconomic stability and support the process of national economic recovery.
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Translator: Katriana
Editor: Fardah Assegaf
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