"Improving global optimism will cause improvement in the volume of global trading."Jakarta (ANTARA News) - Bank Indonesia (BI, the central bank) on Tuesday decided to maintain its reference rate at 6.75 percent as well as its tight monetary policy to control inflation which is under pressure from volatile food prices.
The central bank`s governor, Darmin Nasution, in a press conference held after a board of governors` meeting said the decision was taken in view of global economic recovery ahead which was improving as seen in upward adjustments of global economic growth projections by various international institutions.
"Improving global optimism will cause improvement in the volume of global trading. This will positively affect demand for export products and help boost domestic economic growth," he said.
The process of global economic recovery however is still facing risks of uncertainty due to the debt crisis in a number of countries in Europe and potential disruptions of production after the earthquake in Japan, he said.
The increasing world price of oil and food commodities are also predicted to still continue to give inflationary pressures in many advanced countries and emerging economies including Indonesia.
On domestic side, he said, the board of governors viewed Indonesia`s economic growth was predicted to rise to 6.0-6.5 percent in 2011 and 6.1-6.6 percent in 2012.
The growth is driven by sources of growth which have become more balanced in line with increasing investment and solid export performance.
In the second quarter of 2011, the country`s economic growth is expected to be quite high at 6.4 percent with investment role in increasing the economic capacity especially through foreign capital investment which is projected to continue to increase in line with strong domestic as well as external demand and improving sovereign credit rating.
All economic sectors are predicted to record high growth with the highest recorded at the transportation and communications sector, trade, hotel and restaurant and construction.
(Uu.H-YH/A/HAJM/S012)
Editor: Priyambodo RH
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