Rangkuman Rapat Dewan Gubernur Bank Indonesia Bulan April 2023

Summary

The Bank Indonesia Governor's Board meeting held on April 17-18, 2023, decided to maintain the BI Seven Days Reverse Repo Rate at 5.75%, with the deposit facility rate at 5% and the lending facility rate at 6.5%. This decision aligns with a preventive and forward-looking monetary policy aimed at curbing inflation expectations and ensuring inflation remains within the target range of 3±1% for the remainder of 2023. Additionally, the stability of the Rupiah exchange rate is being strengthened to manage imported goods inflation and mitigate the impact of global financial market uncertainties.

Takeaways

• 😀 Bank Indonesia's Board of Governors decided to maintain the BI 7-Day Reverse Repo Rate at 5.75% on April 17 and 18, 2023.
• 😀 The decision also maintained the deposit facility rate at 5% and the lending facility rate at 6.5%.
• 😀 The policy is aligned with a preventive and forward-looking monetary policy stance.
• 😀 The goal is to continue reducing inflation expectations and manage inflation moving forward.
• 😀 Bank Indonesia believes that the 5.75% rate is sufficient to keep core inflation within the target range of 3% ± 1%.
• 😀 Consumer Price Index (CPI) inflation is expected to return to the 3% ± 1% target earlier than previously projected.
• 😀 The monetary policy aims to stabilize the value of the Rupiah against global financial market uncertainties.
• 😀 The strengthening of the Rupiah is crucial for controlling imported goods inflation and mitigating its impact.
• 😀 The decision supports Bank Indonesia's objective of ensuring stable inflation in the remaining months of 2023.
• 😀 The Bank's policy remains consistent with efforts to maintain economic stability amidst global financial volatility.

Q & A

What decision did the Bank Indonesia Board of Governors make on April 17-18, 2023?

The Bank Indonesia Board of Governors decided to maintain the BI Seven-Day Reverse Repo Rate at 5.75%, the deposit facility rate at 5%, and the lending facility rate at 6.5%.

Why did Bank Indonesia maintain the current interest rates?

The decision was consistent with a preventive monetary policy stance aimed at ensuring continued expectations of inflation decline and controlling inflation in the future.

What is the target inflation rate for Indonesia in the coming year?

The target inflation rate for Indonesia is set to remain within a range of 3% ± 1% for the remainder of 2023, with consumer price inflation expected to return to this target earlier than previously anticipated.

What is the significance of the 5.75% BI Seven-Day Reverse Repo Rate?

The 5.75% BI Seven-Day Reverse Repo Rate is considered adequate to guide core inflation and ensure it remains controlled within the target range of 3% ± 1% throughout the rest of 2023.

What measures is Bank Indonesia taking to stabilize the Rupiah?

Bank Indonesia is strengthening the policy to stabilize the Rupiah in order to control inflation from imported goods and mitigate the impact of global financial market uncertainties on the Rupiah's exchange rate.

How does the current monetary policy aim to control inflation?

The policy focuses on maintaining the 5.75% BI Seven-Day Reverse Repo Rate to ensure that core inflation remains within the target range, as well as controlling imported inflation through stabilizing the Rupiah.

What impact does the global financial market uncertainty have on Indonesia's monetary policy?

Global financial market uncertainty can affect the exchange rate of the Rupiah, and Bank Indonesia aims to mitigate these impacts through policy measures to ensure financial stability and control inflation.

What is the role of the Rupiah exchange rate in Bank Indonesia's inflation control strategy?

The Rupiah exchange rate plays a key role in controlling inflation, particularly inflation from imported goods. A stable Rupiah helps mitigate the risk of rising prices for imported products.

What is meant by 'preventive monetary policy stance' as mentioned in the script?

'Preventive monetary policy stance' refers to taking actions proactively to avoid future inflationary pressures and ensure economic stability, rather than reacting to inflationary events after they occur.

What is the expected timeline for inflation to return to the target range?

Inflation is expected to return to the target range of 3% ± 1% earlier than initially predicted, with this stabilization occurring within the remainder of 2023.