Indonesia struggles with inflation

Indonesian-rupiahIndonesia’s central bank raised its benchmark interest rate double than economists forecast by 50 basis points to 6.5 per cent, the bank announced in a release on July 11.

“The policy was adopted to ensure that inflation will return to its target path after the fuel price hike. In addition, Bank Indonesia will also strengthen its policy mix,” the release said.

These measures include “providing adequate liquidity in the foreign exchange market,  enhanced loan-to-value regulation in the property sector and minimising inflationary pressure to maintain macroeconomic stability as well as financial system stability.”

Indonesia in June became ASEAN’s first major economy to boost rates in 2013, facing one pf Asia’s worst performing currencies.

Inflation is expected to peak in July after the fuel price rise of June and the beginning of the fasting month of Ramadan in the world’s most populous Muslim nation. Higher housing costs are also contributing to inflation.

The Indonesian economy grew 6.02 per cent in the first three months of 2013 from a year ago, after expanding 6.11 per cent from the last quarter of 2012. The central bank has lowered its economic growth forecast for 2013 to between 5.8 to 6.2 percent from a previous estimate of as much as 6.6 per cent.

1 US dollar stood at 9,970 Indonesia rupiah on July 11.



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Indonesia's central bank raised its benchmark interest rate double than economists forecast by 50 basis points to 6.5 per cent, the bank announced in a release on July 11. "The policy was adopted to ensure that inflation will return to its target path after the fuel price hike. In addition, Bank Indonesia will also strengthen its policy mix," the release said. These measures include "providing adequate liquidity in the foreign exchange market,  enhanced loan-to-value regulation in the property sector and minimising inflationary pressure to maintain macroeconomic stability as well as financial system stability." Indonesia in June became ASEAN’s first major...

Indonesian-rupiahIndonesia’s central bank raised its benchmark interest rate double than economists forecast by 50 basis points to 6.5 per cent, the bank announced in a release on July 11.

“The policy was adopted to ensure that inflation will return to its target path after the fuel price hike. In addition, Bank Indonesia will also strengthen its policy mix,” the release said.

These measures include “providing adequate liquidity in the foreign exchange market,  enhanced loan-to-value regulation in the property sector and minimising inflationary pressure to maintain macroeconomic stability as well as financial system stability.”

Indonesia in June became ASEAN’s first major economy to boost rates in 2013, facing one pf Asia’s worst performing currencies.

Inflation is expected to peak in July after the fuel price rise of June and the beginning of the fasting month of Ramadan in the world’s most populous Muslim nation. Higher housing costs are also contributing to inflation.

The Indonesian economy grew 6.02 per cent in the first three months of 2013 from a year ago, after expanding 6.11 per cent from the last quarter of 2012. The central bank has lowered its economic growth forecast for 2013 to between 5.8 to 6.2 percent from a previous estimate of as much as 6.6 per cent.

1 US dollar stood at 9,970 Indonesia rupiah on July 11.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

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Donation Total: $10.00

 

 

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