TEMPO.CO, Jakarta-Financial Services Authority (OJK) deputy chairman Rahmat Waluyanto said that The Fed’s decision to cancel the plan to raise its interest rate was a cautious move. Therefore, Rahmat hopes that Bank Indonesia (BI) would lower its interest rate further this year.
“Therefore, in the medium and long terms, the domestic economy will grow better,” Rahmat said on Thursday, June 16, 2016.
Following The Fed’s cancellation to raise its interest rate, several stock markets rebounded since market makers accumulated the stocks.
In Asia, Japan’s Nikkei 225 index increased by 0.4 percent, and Hang Seng in Hong Kong increased by 0.9 percent. In Europe, Germany’s DAX index jumped by 0.9 percent. Meanwhile, the S&P 500 index was down by 0.2 percent following to The Fed’s decision.
Rahmat predicted that BI would not cut its rate significantly.
“Therefore, BI will change its policy rate to 7-day repo rate in August with an interest rate of about five percent,” Rahmat explained.
According to Rahmat, positive economic growth projection would provide a positive sentiment at the capital market. However, he warned that there could be stock price depreciation in certain sectors in the short run.
DESTRIANITA