BI: Interest Rate Not Enough to Tackle Inflation
24 June 2014 11:08 WIB
TEMPO.CO, Jakarta - Bank Indonesia (BI) senior deputy governor Mirza Adityawara says that the benchmark interest rate is not enough to handle the rising inflation rate.
"The Interest rate is always higher than inflation. If the inflation rate does not decrease, we cannot lower the interest rate," Mirza said in Makassar, South Sulawesi as quoted by Antara news agency.
He said that a sufficient supply of goods across the archipelago was a crucial issue in lowering inflation.
According to central bank data, Indonesia had never experienced inflation of more than 5 percent until 2013.
In that year, the country saw its inflation rate rise to 8.3 percent due to the increasing price of crude oil.
In addition, BI governor Agus Martowardojo says that the nation needs to accommodate an increasing demand of commodities in the domestic market.
"When demand rises while supply and production are not enough, we are going to see rising imports. This is a big issue and we need to resolve it immediately," Agus said.
ANTARA
