BI Board of Governor's Meeting, August 2016

Febrio Kacaribu (), Alvin Ulido Lumbanraja () and Faradina Alifia Maizar ()
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Febrio Kacaribu: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)
Alvin Ulido Lumbanraja: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)
Faradina Alifia Maizar: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)

No 201608, LPEM FEBUI BI Board of Governor Meeting Brief from LPEM, Faculty of Economics and Business, University of Indonesia

Abstract: We maintain our longstanding view that Bank Indonesia should cut the benchmark rate by 25 bps on Friday meeting, despite BI's decision to postpone rate decrease for the last two meetings. This cut is justified amid mild inflation and expected inflows following muted reaction to Brexit and positive views on tax amnesty program. Higher-thanexpected growth at 5.18% in Q2 2016, combined with persistently low inflation, suggests slack in consumer demand and provides the case for a rate cut.

Keywords: gdp; —; economic; —; economic; outlook; —; inflation; —; macroeconomics; —; interest; rate (search for similar items in EconPapers)
Date: 2016-08, Revised 2016-08
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