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Pressure mounts for BI to tackle inflation
In a meeting with the House of Representatives on Monday, BI deputy governor Destry Damayanti said the central bank was ‘verily concerned’ about inflation and would continue to monitor fluctuations of volatile prices.
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President Joko “Jokowi” Widodo (left) shares a light moment with Bank Indonesia (BI) governor Perry Warjiyo on the sidelines of the BI annual meeting in Jakarta on Nov. 28, 2019. (Antara/Aditya Pradana Putra)
Bank Indonesia (BI) has said that any changes to interest rates would be based on the core inflation indicator.
The apparent shift in focus from the headline inflation figure to core inflation was conveyed by BI deputy governor Destry Damayanti in a meeting with the House of Representatives on Monday.
Destry said the central bank was “verily concerned” about inflation and would continue to monitor fluctuations of volatile prices.
Inflation in many countries has been soaring over the past year, notably in the United States and Europe. The increase in consumer prices has been more contained in Indonesia, even though the rupiah has depreciated significantly against the US dollar.
BI was aiming for core inflation, which is a component of overall inflation, to stay within a target range of 2 to 4 percent, Destry said. That is the same target range Indonesia currently has in place for overall inflation, as measured by the consumer-price index.
“Currently, core inflation stands at 3.6 percent [year-on-year], and, [as a result], BI will strengthen policy coordination with the government, [in particular] with national and regional inflation control teams,” Destry said in the meeting.
Read also: BI keeps rate unchanged despite expecting inflation of 4.2%
