Indonesia central bank: rate hike not first choice at this juncture

  • In Business
  • 2022-08-12 07:19:17Z
  • By Reuters

JAKARTA (Reuters) - An interest rate hike will not be Bank Indonesia's first choice at this juncture, the central bank's deputy governor told the Reuters Global Markets Forum on Friday, even as the country's headline inflation rate rose to a 7-year high.

"We have room to increase the policy rate … But at this juncture, I think we will not put this as a first choice in our policy sequence," Dody Budi Waluyo said in an interview.

Indonesia's headline inflation rate rose to 4.94% in July, above Bank Indonesia's (BI) 2% to 4% target range, but core inflation rate remained within target at 2.86%.

Calls for a rate hike have also gathered pace after data earlier this month showed Southeast Asia's largest economy grew 5.44% on an annual basis in the second quarter, more than expected.

BI is set to hold its monthly policy review on Aug. 22 and 23.

Waluyo said BI will work with the government to address supply issues that had pressured consumer prices, adding: "We will not let headline inflation go up".

He also repeated that BI will only raise rates when it sees a persistent rise in core inflation.

BI is one of very few Asian central banks that has not lifted its benchmark rate from a record low of 3.50%, as earnings from commodity exports have shored up Indonesia's economic resilience.

Indonesia is in a better place to navigate current financial market volatility amid a global monetary tightening and rising geopolitical tensions, Waluyo said.

He defended BI's policy normalisation measures, saying it was not behind the curve as it had moved to tighten liquidity in the financial markets.

He added that as host of the Group of 20 major economies, Indonesia hopes tension in the Taiwan Strait does not derail discussions and efforts to accelerate economic recovery from the COVID-19 pandemic.

(Reporting by Divya Chowdhury; Additional reporting by Stefanno Sulaiman; Writing by Gayatri Suroyo; Editing by Kanuprya Kapoor)


More Related News

US Consumer Confidence Rises a Second Month to Most Since April
US Consumer Confidence Rises a Second Month to Most Since April

(Bloomberg) -- US consumer confidence rose for a second month in September to the highest since April, indicating a strong job market and lower gas prices...

Column: Painful signs emerge that Fed is moving too far, too fast with aggressive rate increases
Column: Painful signs emerge that Fed is moving too far, too fast with aggressive rate increases

The Fed isn't giving the economy time to absorb its rate increases before imposing more pain. That could leave people jobless for no reason.

As Fed fights inflation, recession fears grow
As Fed fights inflation, recession fears grow

Is Inflation actually under control?

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply


  • slotsite
    (2022-08-12 10:29:02Z)

    It's too bad to check your article late. I wonder what it would be if we met a little faster. I want to exchange a little more, but please visit my site slotsite and leave a message!!

  • baccarat online
    (2022-08-12 10:29:31Z)

    I've been looking for photos and articles on this topic over the past few days due to a school assignment, baccarat online and I'm really happy to find a post with the material I was looking for! I bookmark and will come often! Thanks :D


Top News: Business