Economy Slows Down as BI Rate Climbs
12 July 2013 16:10 WIB
TEMPO.CO, Jakarta - Head economist of the Danareksa Research Institute (DRI) Purbaya Yudhi Sadewa has estimated that Indonesia's economy will slow down following Bank Indonesia's decision to increase interest rate by 50 basis point to the level of 6.5 percent.
"Clearly, the economy will not gain additional monetary stimulus," said Yudhi at the Economy Ministry office on Thursday, July 11.
Yudhi added that if the economy slows down, monetary stimulus should be provided in order to stimulate growth. However, the Central Bank implemented the exact opposite: suppressing stimulus by increasing BI rate. Therefore, Yudhi believed that the economy will slow down to minimize deficits from ongoing transactions.
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