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View all search resultsLow inflation may drive Bank Indonesia to cut repo rate
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The logo of Bank Indonesia adorns the main gate of the bank's headquarters in Jakarta. (Antara/File/-)
L
ow inflation might encourage Bank Indonesia (BI) to cut its seven-day repo rate to stimulate the economy, but no binding decision has been taken on the matter, the central bank’s spokesman said.
"From the inflation side, monetary easing is possible,” BI head of communications Tirta Segara told The Jakarta Post on Thursday.
The country’s annual inflation rate rose slightly to 3.07 percent in September, compared with August’s 2.79 percent rate, but remained close to a seven-year low, data from the Central Statistics Agency (BPS) show.
Tirta explained that before setting the repo rate, BI needed to conduct thorough assessments not only by considering inflation, but also the condition of the global economy, domestic economy, exchange rate and financial system stability.
“Moreover, monetary easing could also be done by other means such as cutting the primary reserve requirement (GWM) or exchange rate,” he said.
BI has slashed its benchmark rate five times so far this year. The latest cut was in September in which it reduced its rate by 25 basis points (bps) to 5 percent from 5.25 percent in a bid to improve the domestic economy. (win/dan)
