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BI urged to adjust monetary policy
Stay confident: Coordinating Economic Minister Darmin Nasution smiles during a press conference at the State Palace in Jakarta in December 2015
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Stay confident: Coordinating Economic Minister Darmin Nasution smiles during a press conference at the State Palace in Jakarta in December 2015. The senior minister said on Wednesday that the government was speeding up budget absorption for infrastructure projects as part of efforts to boost Indonesiaâs economic growth. (thejakartapost.com/Wienda Parwitasari) (thejakartapost.com/Wienda Parwitasari)
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span class="inline inline-center">Stay confident: Coordinating Economic Minister Darmin Nasution smiles during a press conference at the State Palace in Jakarta in December 2015. The senior minister said on Wednesday that the government was speeding up budget absorption for infrastructure projects as part of efforts to boost Indonesia's economic growth. (thejakartapost.com/Wienda Parwitasari)
Bank Indonesia (BI) needs to adjust its monetary policy to support the country's economic growth, a senior minister has said.
Coordinating Economic Minister Darmin Nasution said that during a monthly meeting held at BI's office on Wednesday, he had talked to central bank officials about the government's efforts to boost economic growth.
One of the initiatives, he told BI officials, involved the government speeding up budget absorption for infrastructure projects.
Darmin said investments to boost the country's economic growth must be supported by monetary policy that could drive more liquidity.
"With more investment and budget [absorption] achieved in the beginning of the year, more liquidity is required. Let's leave it to the central bank to calculate. I have no suggestions about whether our monetary policy should be loose or tight," Darmin told journalists after attending BI's monthly meeting in Jakarta on Wednesday.
BI is holding a two-day meeting, which will end on Thursday. The central bank's monthly meetings usually run for just one day. Another difference is that the bank invited government representatives to attend its first policy meeting of 2016.
At the meeting, Darmin further said, the government and BI discussed results of their assessments of the monetary sector, financial systems stability, payment systems and rupiah management.
"There was a presentation from BI officials, which described our monetary condition, its pluses and minuses. They covered the condition of our financial systems stability too, such as financial liquidity, problems with credit and other potential problems," he added.
Earlier, bankers considered that BI should have enough space to cut its benchmark interest rate by 25 basis points because inflation remained under control and there was adequate liquidity in the banking industry.
BI has maintained its benchmark interest rate at 7.5 percent for 10 consecutive months due to sluggish global economic conditions. The central bank will announce its decisions on monetary policy at the meeting on Thursday. (ebf)(+)
