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Jakarta Post

Weak June inflation 'good news' for Bank Indonesia rates

  • Riska Rahman

    The Jakarta Post

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Jakarta   /   Tue, July 2, 2019   /  01:23 pm
The Jakarta Post Image
A trader packs chilies into a plastic bag at market in Surabaya, East Java. The monthly inflation rate increased 0.55 percent in June, partly due to increases in the price of food commodities, including chili.(Antara/Zabur Karuru)

The weak inflation in June should be good news for Bank Indonesia (BI), as it had more room to lower its benchmark interest rate – the seven-day reverse repo rate ( 7DRRR ) – after seven consecutive months of maintaining it at 6 percent,Financial analysts say.  Bahana Sekuritas economist Satria Sambijantoro said in Jakarta on Monday that the central bank could cut its rate during the next board of governors meeting in mid-July, “as long as the rupiah’s stability can be maintained in the coming weeks”. Maybank Indonesia economist Myrdal Gunarto shared Satria’s view, saying that the relatively tame inflation in June gave BI an opportunity to cut its benchmark rate. Myrdal said he was upbeat that the central bank could lower its rate by 25 basis points (bps) in the third and fourth quarters of the year, as the June inflat...