BI Board of Governor's Meeting, June 2018

Febrio Kacaribu (febrio.kacaribu@lpem-febui.org), Alvin Ulido Lumbanraja (alvin.lumbanraja@lpem-febui.org) and Syahda Sabrina (syahda.sabrina@lpem-febui.org)
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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)
Syahda Sabrina: Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)

No 201806, LPEM FEBUI BI Board of Governor Meeting Brief from LPEM, Faculty of Economics and Business, University of Indonesia

Abstract: Stronger signal that the Fed will increase Fed Funds rate four times in 2018 and persistent trade deficit in May put additional strains on Rupiah in recent weeks. Despite relatively weak inflation and growth figure, change in Bank Indonesia’s stance to tighten monetary policy is appropriate given current circumstances. The decision to tighten monetary policy is taken amid increase in vulnerability to negative external factors, such as trade war between US and China and European Union, increase in crude oil price in the last 12 months, and price volatility of key export commodities. We see BI’s signal to lift 7-days reverse repo rate this Thursday, along with maintaining direct intervention in forex market, to be the most appropriate policy direction going forward

Keywords: gdp; —; economic; —; economic; outlook; —; inflation; —; macroeconomics; —; interest; rate (search for similar items in EconPapers)
Date: 2018-06, Revised 2018-06
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