Ada Pertanyaan? Hubungi Kami 
Ada Pertanyaan? Hubungi Kami Fitri Novia Heriani, Andin Aditya Rahman
The Meeting of the Board of Governors of Bank Indonesia (Rapat Dewan Gubernur Bank Indonesia – “RDG”) has finally confirmed its plan to increase Bank Indonesia rates, a topic that has recently become a talking point amongst the general public.
BI raised their rate by 50 base points (bps) to 6.5 percent with the deposit facility rate also increasing by 50 bps to 4.75 percent but the lending facility rate remaining the same at 6.75 percent.
“The RDG decided to increase the BI rate by 50 bps to 6.5 percent,” stated Agus Martowardojo, Governor of BI, during a press conference at the BI Complex in Jakarta on Thursday.
Agus explained that such a decision was taken to keep rising inflation at bay after the recent price increase of subsidized fuel hoping that circumstances will return to normal soon.
Other than increasing the BI rate, he continued, BI continues to reinforce their policy mix coveringpolicies to stabilize the rupiah’s exchange rate and liquidity in the foreign exchange market, as well as provisions on mortgages, and loan to value.
In response to this issue, Harry Azhar Azis, Deputy Chairman of Commission XI at the House of Representatives, expressed his disagreement with the decision of BI’s Board of Governors by stating that increasing the BI rate based on inflationary considerations does not make any sense at all.
According to Harry, inflation control is not only undertaken by BI, but it is also at the hands of governmental ministries as well.
“Raising the BI rate because of inflation is baloney. However, if the increase relates to the Rupiah’s exchange rate that makes sense,” stated Harry.
As Commission XI generally questions BI’s decision to increase the BI rate, Commission XI will summon the Governor of BI after recess.
Adding to the mix of controversies, economics expert Tony Prasetiantono applauded BI’s decision to finally raise the BI rate, which he believes will correct Indonesia’s economic growth in 2013 to 5.9 percent. Tony said that BI’s step is appropriate, but also added that an increase by 50 bps is a little too brave.
“Initially I thought it would only be 25 bps. However, I suspect recent data has indeed forced BI to raise the BI rate significantly, so that a greater hemorrhage of foreign exchange reserves will not occur,” he explained.
Tony concluded that the decision to increase the BI rate implicates commercial banks that will also increase their interest rates. After increasing interest rates, there will be risks of non-performing loans and a slowdown in credit growth.
(hot/kc)
Fitri Novia Heriani, Andin Aditya Rahman
The Meeting of the Board of Governors of Bank Indonesia (Rapat Dewan Gubernur Bank Indonesia – “RDG”) has finally confirmed its plan to increase Bank Indonesia rates, a topic that has recently become a talking point amongst the general public.
BI raised their rate by 50 base points (bps) to 6.5 percent with the deposit facility rate also increasing by 50 bps to 4.75 percent but the lending facility rate remaining the same at 6.75 percent.
“The RDG decided to increase the BI rate by 50 bps to 6.5 percent,” stated Agus Martowardojo, Governor of BI, during a press conference at the BI Complex in Jakarta on Thursday.
Agus explained that such a decision was taken to keep rising inflation at bay after the recent price increase of subsidized fuel hoping that circumstances will return to normal soon.
Other than increasing the BI rate, he continued, BI continues to reinforce their policy mix coveringpolicies to stabilize the rupiah’s exchange rate and liquidity in the foreign exchange market, as well as provisions on mortgages, and loan to value.
In response to this issue, Harry Azhar Azis, Deputy Chairman of Commission XI at the House of Representatives, expressed his disagreement with the decision of BI’s Board of Governors by stating that increasing the BI rate based on inflationary considerations does not make any sense at all.
According to Harry, inflation control is not only undertaken by BI, but it is also at the hands of governmental ministries as well.
“Raising the BI rate because of inflation is baloney. However, if the increase relates to the Rupiah’s exchange rate that makes sense,” stated Harry.
As Commission XI generally questions BI’s decision to increase the BI rate, Commission XI will summon the Governor of BI after recess.
Adding to the mix of controversies, economics expert Tony Prasetiantono applauded BI’s decision to finally raise the BI rate, which he believes will correct Indonesia’s economic growth in 2013 to 5.9 percent. Tony said that BI’s step is appropriate, but also added that an increase by 50 bps is a little too brave.
“Initially I thought it would only be 25 bps. However, I suspect recent data has indeed forced BI to raise the BI rate significantly, so that a greater hemorrhage of foreign exchange reserves will not occur,” he explained.
Tony concluded that the decision to increase the BI rate implicates commercial banks that will also increase their interest rates. After increasing interest rates, there will be risks of non-performing loans and a slowdown in credit growth.
(hot/kc)