Analyst: BI to Maintain Interest Rate
13 February 2014 14:34 WIB
TEMPO.CO, Jakarta - Economists have forecasted that Bank Indonesia may keep its reference interest rate at 7.5 percent, considering the inflation rate in January 2014 was predicted not to affect the rupiah.
Bank International Indonesia Chief Economist Juniman said the inflation rate in January 2014 that was set to reach 1.07 percent was caused by distribution cost pressure and did not negatively affect the rupiah's exchange rate.
"The factors affecting Bank Indonesia rate are quite stable, so BI has no reason to adjust its rate," he said yesterday.
Bank Saudara analyst Rully Nova, said that the 7.5 percent BI Rate has been quite aggressive, and further increasing interest rates would disrupt the economy.
"Business activity is slowing down. Banks can barely stand now," she said.
In line with the statement, Bank Tabungan Negara Director General (BTN) Maryono, said that the 7.5 percent BI Rate has affected third party funds and the bank's performance in distributing credits.
"BTN will see the market conditions change as the interest rate is applied. Interest rates for housing mortgages will be also adjusted," he said.
Tony Prasetiantono, an economic analyst from Gadjah Mada University, expected Bank Indonesia not to follow foreign central banks' policy that raised their reference interest rate to block capital outflow.
"The situation in Indonesia is different since there is no capital outflow. In my opinion, BI may increase its rate if the rupiah falls between 12,500 to 13,000 against US dollars," he said.
Tony is optimistic that the trade surplus will strengthen the rupiah.
"But the government still has a lot of homework to keep exports increasing. One of them is to build infrastructure that is supportive of export activities," he added.
BI Communication Department Director Peter Jacobs revealed that the central bank will consider a number of factors in setting its rate.
"BI will take global and domestic economic indicators, including inflation, foreign exchange reserves, and current account deficit," he said.
MEGEL JEKSON | M. AZHAR | GALVAN YUDISTIRA | PINGIT ARIA | FAIZ NASRILLAH | MAYA NAWANGWULAN | RR. ARIYANI
