BI spokesman Difi A Johansyah said the board of governors viewed the present level was still consistent with efforts to achieve the inflation target in the future and conducive for safeguarding financial stability and reducing the impact of global economic conditions on the country`s economy.
"Based on an evaluation of the country`s economic performance and prospects in genera, we believe the domestic economy has remained strong and its stability has been maintained," he said.
In the future, the board of governors would keep monitoring closely possible risks from the worsening conditions of the global economy and maintain the stability of the macro-economic and financial system and provide stimulus to the domestic economy.
Difi said BI`s board of governors had also stated that a combination of monetary and counter-cyclical macro-prudential policies would be needed to manage macro-economy conditions overall and to bring the inflation rate to the targeted level of 3.5 - 5.5 percent in 2012 and 2013.
He said the board of governors had recorded an economic slowdown in the world in 2011 due to uncertainty in the economic and financial recovery in Europe and the US.
The escalation of the crisis in Europe especially in the second semester of 2011 had triggered volatility in the global financial market that led to the weakening of global demand, a decline in the world trade volume and the world commodity prices.
From price point of view inflationary pressure in the advanced countries increased while in the emerging markets relatively moderate though it is still at a high level.
In line with the development countries in the emerging markets at the end of 2011 tend to impose a neutral monetary policy or accommodate a bit while the advanced countries tend to maintain their accomodative monetary policy through liquidity easing.
In domestic terms, Difi said, the board of governors viewed the country`s economic performance in 2011 was still quite strong thanks to macro-economic stability and sustained financial system.
The country`s economy in the fourth quarter of 2011 is expected to grow 6.5 percent so that total economic growth in the year is expected to reach 6.5 percent.
The growth is especially driven by strong domestic demand and sustained export performance.
He said sectors which are still expected to drive growth are industry, transportation and communication, trade, hotel and restaurant.
(Uu.H-YH/HAJM/O001)
Editor: Priyambodo RH
Copyright © ANTARA 2011
