TEMPO.CO, Jakarta - Bank Indonesia (BI) said the policy to keep its key interest rate unchanged at 7.5 percent for the ninth straight month in November remains on the right track, despite weak global economic growth.
The policy is aimed at addressing the current developments in the global economy, the pressure of global finance and possible worst risks in the global economy, BI Governor Agus Martowardojo said on Tuesday.
"As we all see, we have maintained the BI rate at the same level (of 7.5 percent) to guard against the current pressures on Indonesias capital and financial accounts," he said.
While the global economy has not fully recovered, Bank Indonesia will continue to stay alert for pressures coming from the global financial market, he said.
The US economy is growing at a moderate pace, as indicated by weak expansion in the manufacturing and export sectors. Yet, the manpower sector has shown signs of improvement, as reflected by declining unemployment rates, upward salary growth and improving non-farm payroll data, he said.
The developments suggest that the Fed Fund Rate will likely increase in December 2015. On the other hand, economic recovery in Europe and Japan is still vulnerable, prompting many countries to continue their loose monetary policy.
The Chinese economy is also slowing down, as reflected by a decline in the purchasing manager index (PMI) of its manufacturing industry due to a low demand for Chinas exports. As a result, China has adopted a loose monetary policy.
ANTARA
