President Summons BI Governor over Economic Conditions

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  • TEMPO.CO, Jakarta - President Joko Widodo has summoned Bank Indonesia's Governor, Agus Martowardojo Thursday, August 27, to discuss Indonesia's recent economic development.

    "The President summoned me and Finance Minister Bambang Brodjonegoro to provide him with updates relating to Indonesia's monetary and fiscal policies and position," said Agus at the President's Palace Complex after the meeting.

    Agus explained that the turmoil experienced by Indonesia is largely intertwined with external factors, such as the hncertainties surrounding the Fed's plan to raise the US Federal Fund rate, China's decision to devalue the Yuan, as well as its' decision to lower its' interest rate, yet again.

    "All of this is happening simultaneously as the goobal economic slowdown, which consequently impacts the Indonesian economy," said Agus, who added that Bank Indonesia will undertake a number of 'calculated and consistent' measures to ensure that Indonesia's inflation remains under control.

    "Our aim is to keep inflation around the four percent mark - gove or take one percent - whilst at the same time keeping Indonesia's transactional deficit within an acceptable bracket," said Agus, which also assured that Bank Indonesia will continue to update its' macroprudential policies as the situation develops.

    Bank Indonesia, continued Agus, will enforce the use of Rupiah for domestic transactions. "We also explained to the President the justifications for Bank Indonesia's current policies - all of which are aimed to keep the Rupiah's volatility to a minimum, given the conditions of our foreign exchange reserves," he said.

    Agus also said that Bank Indonesia will continue to coordinate with the appropriate authorities, under the auspices of the Financial System Stability Coordination Forum (FKSSK).

    The Governor also said that hopefully Indonesia could go through this economically turbulent period with as little harm as possible, and that Indonesia's economic fundamentals would continue to improve.

    "We want to reduce inflation to four or five percent from its' current eight percent, and our current account deficit to two percent of our national GDP. It seems like we are quite successful, as we have been able to post several surpluses this year," said Agus.