BI to use repos as monetary tool<\/p>\n
Dow Jones, Jakarta<\/p>\n
Bank Indonesia Governor Burhanuddin Abdullah said on Friday
\nthat the central bank will soon use government bond repurchase
\nagreements (repos) as one of its open market operation tools.<\/p>\n
He also reiterated that the central bank is keeping a
\ntightening bias on monetary policy amid mounting inflationary
\npressures.<\/p>\n
\"The new instrument will add to the number of monetary tools
\nthat we can use to stabilize the money market,\" Burhanuddin told
\nreporters.<\/p>\n
He said the central bank will first sign an agreement with
\nprimary bond dealers before using bond repos as its latest
\nmonetary tool.<\/p>\n
Burhanuddin added that he hopes the agreement can be signed
\nnext month.<\/p>\n
Currently, Bank Indonesia uses one- and three-month SBI
\npromissory notes, and one- and seven-day deposits, known as
\nFASBI, as its main tools to control money supply.<\/p>\n
Burhanuddin also said the central bank maintains a tightening
\nbias on monetary policy amid rising inflationary pressures.<\/p>\n
However, he declined to comment on when the central bank would
\nraise interest rates.<\/p>\n
\"The only thing that I can say is that interest rates will
\nrise if inflationary pressures continue to rise,\" he added.<\/p>\n
The weighted rate of its one-month SBI notes is currently at
\n7.37 percent. Analysts expect it will slowly rise to 8 percent by
\nthe end of the year.<\/p>\n
Bank Indonesia has been reluctant to raise interest rates on
\nconcerns that doing so would curb economic growth.<\/p>\n
The government expects the economy to grow 4.8 percent this
\nyear, picking up from 4.1 percent last year. Such a growth rate,
\nhowever, is among the lowest projected in the region and isn't
\nenough to stop unemployment from rising.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bi-to-use-repos-as-monetary-tool-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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