MONETARY POLICY STATEMENT OF THE GOVERNOR OF BANK INDONESIA: The Tight Bias Monetary Policy Will Still Be Applied: BI Rate is Kept at 12,75% - Bank Sentral Republik Indonesia
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October 26, 2020
No.8/ 1 /PSHM/Humas

The meeting of the Board of Governors of Bank Indonesia (RDG BI) held today on January 9, 2006 stipulated the continuity of a The Tight Bias Monetary Policy to control the inflation for the medium and long term period. Based on the policy, RDG Bank Indonesia has decided to maintain BI rate at the level of 12,75%. Despite of an occurrence of deflation in December 2005, the Board of Governors of Bank Indonesia considered the expectation of inflation in the future, which would still be high, as the considerable factor behind the high inflation rate. Moreover, the Board of Governors still sees several risk factors capable of giving pressure to the stability of exchange value such as the unstable prices of world's oil, the global imbalance, and the tight monetary cycle in global economy that remains to exist.

Bank Indonesia also recognizes a strong current of optimism for the future economic prospect. With the actions already taken by the Government in improving the situation for investment and real sectors, and the consistency of Bank Indonesia monetary policies, it is predicted that the prospect of economy in Indonesia for the year 2006-2008 will be much better.

Jakarta, January 9, 2006

Rizal A. Djaafara
Head of Bureau



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