Interest rate can still go down: BI<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Bank Indonesia said Friday there was still room for its bench-
\nmark interest rate to fall in the near future on the back of
\neasing inflationary pressure.<\/p>\n
Bank Indonesia deputy governor Miranda Goeltom said that
\nexpectation of a stronger rupiah towards the end of the year was
\nslowing down inflation.<\/p>\n
"... Low inflation shows us there is room to further lower the
\ninterest rate," Antara quoted Miranda as saying.<\/p>\n
Miranda was commenting on data provided by the Central Bureau
\nof Statistics (BPS) a day earlier which shows July year-on-year
\ninflation slowed down to 10.05 percent from 11.48 percent posted
\nin June, signaling the government's single-digit inflation target
\nis still within reach.<\/p>\n
Annualized inflation has been in a declining trend since
\nFebruary, which has allowed Bank Indonesia to bring down the
\ninterest rate of its one-month SBI promissory notes to around
\n14.93 percent compared to more than 17 percent earlier this year.<\/p>\n
Miranda was optimistic that the declining inflation trend
\nwould continue, in accordance with the expected solid display by
\nthe local currency against the U.S. dollar in the future.<\/p>\n
The rupiah closed at Rp 9,085 per dollar on Friday, an
\nappreciation of 12 percent since the start of the year.<\/p>\n
A relatively stable domestic political scene, plus divestment
\nof assets held by the Indonesian Bank Restructuring Agency (IBRA)
\nwould likely help stabilize the local unit, which in turn would
\nlower prices of imported goods.<\/p>\n
This would help lessen the pressure on inflation.<\/p>\n
"... And government plans to divest its stake in Bank Niaga
\nand Bank Danamon later this year makes us believe that the
\nchances of the rupiah to further strengthen are wide open,
\nstronger than the current level," she added.<\/p>\n
On the monetary policy front, lowering the interest rate would
\nbe made possible by controlling base money.<\/p>\n
As of July, currency in circulation stood at Rp 115.3
\ntrillion, far below Rp 125 trillion targeted by the International
\nMonetary Fund (IMF).<\/p>\n
The central bank, following the BPS announcement, cut its
\novernight intervention rate - the rate it offers commercial banks
\nto deposit money in Bank Indonesia - by 50 basis points Friday to
\n13.625 percent.<\/p>\n
The rate is a signal of easing monetary policy.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/interest-rate-can-still-go-down-bi-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }