"A meeting of the Board of Governors of Bank Indonesia on April 11, 2013 decided to keep the BI Rate at 5.75 percent," outgoing Central Bank Governor Darmin Nasution said.
Jakarta (ANTARA News) - Bank Indonesia, the country`s central bank, maintained its benchmark interest rate (BI Rate) at 5.75 percent, saying it is consistent with the country`s inflation targets of 3.5% and 5.5% in 2013 and 2014.

"A meeting of the Board of Governors of Bank Indonesia on April 11, 2013 decided to keep the BI Rate at 5.75 percent," said outgoing Central Bank Governor Darmin Nasution in a news conference after the meeting here on Thursday.

Darmin said upsurge in foodstuff prices had pushed up the consumer price index in March to 0.63 percent month to month or 5.9 percent on year, but the core inflation remained stable at 4.21 percent on-year.

"The increase in inflation in the past three months was not a monetary phenomenon, rather it was caused by shortage in supplies of three commodities - red onion, garlic and chili - related to import policy adopted by the government. We believe, the inflation will still be within target this year," he said.

Currently the core inflation is more or less the same as last year and is still in line with expectation of the people in general, within control and with adequate production capacity, he added.

"Altogether, the inflation is still manageable. We are confident, with the measures already taken by the government, the inflationary pressure from foodstuff would be normal again in one or two months," he said.

Meanwhile, Bank Indonesia plans to intensify monetary operation through absorption of excess liquidity, by encouraging longer term investment to forestall growing short term inflationary pressure with the food price hike lately, and continued pressure on external balance.

"In addition, Bank Indonesia continues to take precautionary step against a number of risks of inflationary pressure and will respond with monetary policy as needed," Darmin said.

The policy to stabilize rupiah is in line with fundamental condition adopted so far, will be maintained, he added.

He said Bank Indonesia also will strengthen coordination with the government by focusing more on efforts to press down current account deficit and minimize the potency of inflationary pressure from volatile foods, including horticulture import policy.(*)

Editor: Heru Purwanto
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