Open AccessQUARTERLY ANALYSIS: The Progress of Monetary, Banking and Payment System Quarter II - 2011
Author(s) -
Author Team of Quarterly Report Bank Indonesia
Publication year - 2011
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.505
H-Index - 4
ISSN - 2460-9196
DOI - 10.21098/bemp.v14i1.75
Subject(s) - inflation (cosmology) , monetary policy , price of stability , government (linguistics) , economics , monetary economics , quarter (canadian coin) , inflation targeting , capital (architecture) , payment , business , financial system , economic policy , finance , linguistics , philosophy , physics , archaeology , theoretical physics , history
The Board of Governors Meeting (Rapat Dewan Gubernur/RDG) of Bank Indonesia on 12 April 2011 has decided to maintain the BI rate by 6.75%. This decision does not change the direction of Bank Indonesia»s monetary policy which tends to be strict in an effort to control the inflationary pressures that are still high, amid the government efforts to reduce inflationary pressure from volatile foods group. The Board of Governors considered that the strengthening of the rupiah so far can reduce these inflationary pressures, particularly from the rising price of international commodities (imported inflation). In addition, to minimize the negative impact of short-term foreign capital flows on monetary stability and financial system, the Board of Governors also has decided to replace the one-month holding period on SBI to six-month holding period, which shall take effect on May 13, 2011. Looking ahead, Bank Indonesia assessed that the possibility of the BI rate level adjustment is still open to dampen the incoming inflationary pressures. Bank Indonesia believed that the implementation of monetary and macro-prudential policy mix, supported also by the strengthened coordination of government policy, will be able to maintain the macroeconomic stability and bring inflation to the target, which are 5% ± 1% in 2011 and 4.5% ± 1% in 2012.