04 May 2007
Deflation Increase Possibility of BI Rate Decrease
It is possible that the Bank Indonesia's interest standard (BI Rate) will decrease due to deflation (goods and service's price decreases) last April.
It is estimated that by the end of the year, the BI Rate could reach 8.5 percent.
“The room for a BI Rate decrease is larger,” said Burhanuddin Abdullah, Bank Indonesia (BI Governor) in Jakarta yesterday (2/5).
Deflation, he said, also enlarged the possibility of reaching the inflation target of six percent plusor minus one percent.
“The possibility to reach the inflation target is larger,” he said.
On Tuesday (1/5) the Central Statistic Bureau (BPS) announced there was 0.16 deflation, better compared to in March which underwent inflation of 0.24 percent.
Of 45 cities surveyed by BPS, 30 cities or 66 percent underwent goods and service's price decreases, while the remainders underwent inflation.
The deflation was due to the decrease of prices shown by the decreasing index of food category (11.30 percent) and leisure and sports education (0.03 percent).
The causes of deflation include the drastic decrease of rice and red chili prices as also other vegetables.
In the State Budget 2007, the government targets annual inflation to be 6.5 percent while BI's target is six percent plus-minus one percent.
Currently, the BI Rate is at the level of nine percent.
During the meeting of Governors Board in early April, the central bank did not lower the interest standard as there was a threat of inflation.
Boediono, Coordinating Minister for the Economy, stressed that the deflation in April was extreme.y good agreeable because it strengthened the government's optimism in maintaining economic stability.
Therefore, the government will maintain the low inflation rate maximally in the following months.
__________
tempo
It is estimated that by the end of the year, the BI Rate could reach 8.5 percent.
“The room for a BI Rate decrease is larger,” said Burhanuddin Abdullah, Bank Indonesia (BI Governor) in Jakarta yesterday (2/5).
Deflation, he said, also enlarged the possibility of reaching the inflation target of six percent plusor minus one percent.
“The possibility to reach the inflation target is larger,” he said.
On Tuesday (1/5) the Central Statistic Bureau (BPS) announced there was 0.16 deflation, better compared to in March which underwent inflation of 0.24 percent.
Of 45 cities surveyed by BPS, 30 cities or 66 percent underwent goods and service's price decreases, while the remainders underwent inflation.
The deflation was due to the decrease of prices shown by the decreasing index of food category (11.30 percent) and leisure and sports education (0.03 percent).
The causes of deflation include the drastic decrease of rice and red chili prices as also other vegetables.
In the State Budget 2007, the government targets annual inflation to be 6.5 percent while BI's target is six percent plus-minus one percent.
Currently, the BI Rate is at the level of nine percent.
During the meeting of Governors Board in early April, the central bank did not lower the interest standard as there was a threat of inflation.
Boediono, Coordinating Minister for the Economy, stressed that the deflation in April was extreme.y good agreeable because it strengthened the government's optimism in maintaining economic stability.
Therefore, the government will maintain the low inflation rate maximally in the following months.
__________
tempo
Labels: Bank, Internet News
