Statement Of The Governor Of Bank Indonesia : Bank Indonesia Lowered BI Rate to 12,50% - Bank Sentral Republik Indonesia
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October 25, 2020
No.8/ 23 /PSHM/Humas

The Board of Governor Meeting (RDG) on May 9, 2006 decided to lower BI Rate to 12,50% or 25 basis points (bps) lower than the previous rate. The policy that still reflects the tight bias monetary policy as the monetary policy stance was stipulated after several assessments on the current economy and future economic prospect which reflected a continuous stability of macro economy in April 2006. These could be derived from the development of exchange value, inflation and monetary condition. The Board of Governor expects that the economic stability will be stronger and medium to long term inflation shall be as targeted.

Rupiah exchange value showed an upward trend and tended to be below the prediction made at the beginning of the year because of short term capital that still comes in large amount. From the monetary side, a more optimum implementation of monetary policy so far has kept the monetary condition, even when there is a big current of foreign capital intake. Inflation in April 2006 was recorded at 0,05% (mtm) or 15,1% (yoy) and until April 2006 was noted at 2,03% (ytd). With the positive development and a continuous downward trend of inflation expected by the public, IHK inflation in 2006 is expected to be below the projected 81%.

Nevertheless, Bank Indonesia will still observe various risk factors both internal and external ones to anticipate the continuation of macro economic stability. Internally, the risk factors convey fiscal stimuli force and the possibility of interrupted distribution of goods caused by the condition of the infra-structure in several areas. Externally, the development of world oil and direction of global monetary policy that is more likely to be tight have to be carefully monitored.

Jakarta, May 9, 2006

Budi Mulya



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