Central Bank Policy Direction: Monetary Easing Continues

In the board of governors (RDG) meeting yesterday, Bank Indonesia (BI) decided to maintain the benchmark interest rate of the BI 7-Day Reverse Repo Rate at 3.5%,

and remains committed to being a standby buyer in the primary market for Government Securities (SBN). In fact, the central bank of the United States (US) The Fed is ready to tighten policy in line with increasing concerns about the inflation rate. This was done by stopping the purchase of government bonds and raising the benchmark interest rate. However, according to BI Governor Perry Warjiyo, the Fed is still accommodative and thinks it is too early to reduce monetary policy stimulus or taper. “We see the Fed's tapering will not happen this year. We will monitor it from time to time if there are new indicators that drive change," Perry said the positive developments in global financial markets will have an impact on increasing foreign capital inflows to developing countries, including Indonesia, and also strengthen currencies in various countries. . According to him, the high inflation rate in the US is temporary. Fundamental inflationary pressures are predicted to occur next year and 2023. In addition, the unemployment rate in the US is still quite high. In line with that, Perry gave a strong signal to reduce the purchase of SBN in the primary market or tapering off at the beginning of next year. Most likely BI's position will be ahead of the curve or ahead of the tapering conducted by the Fed.

|•SOURCE•| Image :SUARA |

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