BI Board of Governor's Meeting, July 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 201807, LPEM FEBUI BI Board of Governor Meeting Brief from LPEM, Faculty of Economics and Business, University of Indonesia

Abstract: Bank Indonesia’s decision to raise 7-days Reverse Repo Rate by 100 bps in the last three months have shown meaningful results with relatively stable Rupiah in the last two weeks. Clear and strong signals from Bank Indonesia that they prioritize exchange rate stability has reduced uncertainties in the market due to Federal Reserve’s decision to raise Fed Fund rate faster. With lower volatility in the global market compared to last month and absence of further negative factors, Bank Indonesia has ample room to hold its benchmark rate this Thursday, given that domestic inflation is still very low. Going forward, Bank Indonesia still needs to closely monitor potential sources of downward pressure for Rupiah, such as ongoing trade war between United States, China, and EU or price volatility of key export commodities.

Keywords: gdp; —; economic; —; economic; outlook; —; inflation; —; macroeconomics; —; interest; rate (search for similar items in EconPapers)
Date: 2018-07, Revised 2018-07
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