ID :
14949
Tue, 08/05/2008 - 17:15
Auther :
Shortlink :
http://m.oananews.org//node/14949
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INCREASE IN BI RATE NOT TO AFFECT ECONOMY : BI GOVERNOR
Jakarta, Aug 5 (ANTARA) - Bank Indonesia (BI) said the increase in the central bank's benchmark interest rate (BI rate) by 25 basis points to 9.00 percent would not affect Indonesia's economic activities.
BI Governor Boediono said here on Tuesday there were indicators showing that domestic demand was still strong and the banking industry's resilience had remained under control supported by a good implementation of banks' intermediary functions.
He said year-on-year (YoY) bank credits had still grown by 31.6 percent while the gross amount of non-performing loans (NPLs) had dropped to 4.08 percent.
The BI governor also predicted that Indonesia's economy in 2008 would still grow well supported by export growth, public consumption spending and relatively high government expenditure.
Boediono said domestic demand would also be supported by an increase in regional spending and the start of the 2009 general election preparations.
He said the relatively high risks of inflationary pressures had been taken by BI to increase its BI rate this month, despite the fact that the impact of the fuel oil price hikes on inflation had been significantly reduced.
The BI governor said in order to make the monetary policy effective, the BI rate increase was followed by the optimizing of other monetary instrument policies such as taking under control the volatility of currency exchange rates and the absorption of liquidity excesses through open market operations.
"With the policy, the 2009 inflation rate target of 6.5 - 7.5 percent is expected to be achieved," he said.
BI Governor Boediono said here on Tuesday there were indicators showing that domestic demand was still strong and the banking industry's resilience had remained under control supported by a good implementation of banks' intermediary functions.
He said year-on-year (YoY) bank credits had still grown by 31.6 percent while the gross amount of non-performing loans (NPLs) had dropped to 4.08 percent.
The BI governor also predicted that Indonesia's economy in 2008 would still grow well supported by export growth, public consumption spending and relatively high government expenditure.
Boediono said domestic demand would also be supported by an increase in regional spending and the start of the 2009 general election preparations.
He said the relatively high risks of inflationary pressures had been taken by BI to increase its BI rate this month, despite the fact that the impact of the fuel oil price hikes on inflation had been significantly reduced.
The BI governor said in order to make the monetary policy effective, the BI rate increase was followed by the optimizing of other monetary instrument policies such as taking under control the volatility of currency exchange rates and the absorption of liquidity excesses through open market operations.
"With the policy, the 2009 inflation rate target of 6.5 - 7.5 percent is expected to be achieved," he said.
