ID :
28856
Thu, 11/06/2008 - 23:15
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https://www.oananews.org//node/28856
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BI CLOSELY OBSERVING IMPACT OF RUPIAH'S DEPRECIATION ON INFLATION
Jakarta, Nov 6 (ANTARA) - Bank Indonesia (BI/central bank) Deputy Governor Hartadi A Sarwono said BI was keeping an eye on the impact of the rupiah's weakening on inflation toward the end of the year.
"We need to continue to observe the impact of the depreciation of the rupiah because now the rupiah's depreciation is the only factor which could drive up inflation," he said here on Thursday.
He said the impact of the rupiah's depreciation would not however be too big because adjustments had been made in imports.
"Several months ago, inflation was still high because imports were also high. But now, imports are on a downturn so their impact on the rupiah's depreciation will not be significant," Sarwono said.
He said BI had not yet obtained complete information on the impact of the rupiah's depreciation on inflation in the future so that BI had decided to maintain its benchmark interest rate, locally known as BI rate, at 9.5 percent.
The central bank decided on Thursday to maintain its present benchmark interest rate at 9.5 percent after it conducted an assessment of the country's present economic conditions.
"Bank Indonesia deems it important to continue pursuing accurate monetary policies to achieve balance between economic growth and monetary stability," BI Governor Boediono said.
Boediono said the risk of inflationary pressures rising again in the next two months was predicted to be still high. It was also predicted the year-on-year inflation rate would be recorded at 11.5 - 12.5 percent at the end of the year.
"Bank Indonesia will always adopt the necessary policies in an effort to curb sharp fluctuations in he rupiah's value against the greenback," the BI governor said.
In May 2008, the BI rate was raised 0.25 basis points to 8.25 percent. It was later raised several times and in October it was increased to the present 9.5 percent level.
"We need to continue to observe the impact of the depreciation of the rupiah because now the rupiah's depreciation is the only factor which could drive up inflation," he said here on Thursday.
He said the impact of the rupiah's depreciation would not however be too big because adjustments had been made in imports.
"Several months ago, inflation was still high because imports were also high. But now, imports are on a downturn so their impact on the rupiah's depreciation will not be significant," Sarwono said.
He said BI had not yet obtained complete information on the impact of the rupiah's depreciation on inflation in the future so that BI had decided to maintain its benchmark interest rate, locally known as BI rate, at 9.5 percent.
The central bank decided on Thursday to maintain its present benchmark interest rate at 9.5 percent after it conducted an assessment of the country's present economic conditions.
"Bank Indonesia deems it important to continue pursuing accurate monetary policies to achieve balance between economic growth and monetary stability," BI Governor Boediono said.
Boediono said the risk of inflationary pressures rising again in the next two months was predicted to be still high. It was also predicted the year-on-year inflation rate would be recorded at 11.5 - 12.5 percent at the end of the year.
"Bank Indonesia will always adopt the necessary policies in an effort to curb sharp fluctuations in he rupiah's value against the greenback," the BI governor said.
In May 2008, the BI rate was raised 0.25 basis points to 8.25 percent. It was later raised several times and in October it was increased to the present 9.5 percent level.
