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Jakarta Post

Quo vadis Bank Indonesia's policy communication?

  • Haryo Kuncoro
    Haryo Kuncoro

    Research director at the Socio-Economic & Educational Business Institute (SEEBI)

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Jakarta   /   Mon, December 9, 2019   /  01:26 pm
Quo vadis Bank Indonesia's policy communication? Logo of Bank Indonesia, in Jalan Thamrin, Jakarta. (JP/Rafaela Chandra)

The results of Bank Indonesia’s (BI) board of governors meeting from Nov. 20 to 21, seemingly leave a little bit of contradiction. On the one hand, BI decided, starting Jan. 2, 2020, to ease the reserve requirement to promote liquidity in the money market. In BI’s point of view, the availability of liquidity is required for the banking industry to conduct financial intermediary functions. The increase in bank loan capacity, in turn, will preserve the momentum of domestic economic growth amid the global economic downturn. On the other hand, BI at the same time issued a projection of bank loan growth. The bank loan growth target throughout this year was cut to 8 percent, while the figure for next year is slightly higher. This means that BI does not anticipate any dramatic increase in the demand for loans. As a result, the release of reserve requirement easing and at th...

Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.