Monetary Policy Statement By The Governor of Bank Indonesia - Bank Sentral Republik Indonesia
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October 31, 2020

Considering the latest economic   development and the prospects of the monetary economic  in the coming months, and considering the effort to reach the medium term inflation rate target,  Bank Indonesia in the Board of Governors’ Meeting (RDG) on  August 9,  2005 decided to increase the BI Rate by  25 basis points to be 8.75%. In relation to this, the tight bias monetary policy shall remain.  
The decision to increase the BI Rate is based on the following considerations :

  • Inflation expectation tends to increase in line with the increase in world oil prices which may increase  administered prices and weaken Rupiah exchange rates.
  • Increase in the risk of macroeconomic stability related to external factor development particularly the increase in the Fed’s interest rates,  the weakening of world’s major currencies against US Dollars and the increase in oil prices.

The BI Rate increase is expected to still be able to support the economic recovery process.

Considerations, assesments and projection of the  Indonesian  economy are available on the  next page and  in the Monetary Policy Review of August 2005.

In order to support  the implementation of the  BI Rate, efforts to manage banking liquidity through the Open Market Operations (OMOs) using Bank Indonesia Certificates and Bank Indonesia Deposit Facility as well  as FTO (Fine Tune Operation) instruments will still be utilized.

Jakarta,   August 9, 2005
Directorate of Strategic Planning
and Public Relations
Halim Alamsyah



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