Monetary Policy Must Be Aligned in Real-Fiscal Sector

By : Herry Barus And Aldo Bella Putra | Friday, November 10 2017 - 23:00 IWST

Menteri PPN/Kepala Bappenas Bambang P.S. Brodjonegoro, dan Ketua Kadin Indonesia Rosan Roeslani, Plt. Dirjen Bina Konstruksi Kementerian PUPR Danis H. Sumadilaga, di Jakarta, Rabu (8/11). (Foto Rizki Meirino)
Menteri PPN/Kepala Bappenas Bambang P.S. Brodjonegoro, dan Ketua Kadin Indonesia Rosan Roeslani, Plt. Dirjen Bina Konstruksi Kementerian PUPR Danis H. Sumadilaga, di Jakarta, Rabu (8/11). (Foto Rizki Meirino)

INDUSTRY.co.id - Jakarta - Head of National Development Planning Agency (Bappenas) Bambang Brodjonegoro assess monetary policy should be in line with the real sector and fiscal sector to encourage the economy to grow optimally.

This was conveyed Bambang responded to the policy of Bank Indonesia as a monetary authority called a number of observers less precise lower interest rates in August and September and last from 4.75 percent to 4.25 percent.

"I am reluctant to comment on it, because in my opinion the monetary policy must be in line with the real and fiscal sectors at that time that the monetary authorities have helped to stimulate the real growth," Bambang said in Jakarta on Friday (10/11/2017)

Previously, senior economist from the University of Indonesia Faisal Basri said the policy of central bank interest rate cuts is less precise when it is almost certain that the Fed will increase interest rates in December 2017.

He also said that the decline in the benchmark interest rate also makes the rupiah exchange rate weakening against the US dollar so that the central bank must intervene and consequently the eroded foreign exchange reserves.

Indonesia's foreign exchange reserves at the end of October 2017 recorded 126.5 billion US dollars. The position is lower than the end of September 2017 which amounted to 129.4 billion US dollars.

The decline in foreign exchange reserves in October 2017 was mainly influenced by the use of foreign exchange for servicing of official foreign debt and stabilization of the rupiah exchange rate in accordance with its fundamentals.

In addition, the decline in foreign exchange reserves is also influenced by the decrease in the placement of bank foreign exchange at Bank Indonesia in line with the requirement of payment of foreign currency liabilities.

In August 2017, BI lowered the BI 7-day Reverse Repo Rate from 4.75 percent to 4.5 percent. At the time, the central bank said, declining policy rates are expected to strengthen banking intermediation, thereby strengthening financial system stability and supporting higher economic growth.

A month later, BI again lowered its benchmark interest rate from 4.5 percent to 4.25 percent. BI reiterated that the policy interest rate cut is expected to support the improvement of banking intermediation and ongoing domestic economic recovery. (Ant)

News Comment

Today's Industry

One of Apartments offered by Savyavasa and Permata Bank Launch Exclusive Foreign Mortgage Program

Senin, 09 Juni 2025 - 14:22 WIB

Savyavasa and Permata Bank Launch Exclusive Foreign Mortgage Program

Savyavasa, a luxury residential development by Swire Properties and JSI Group under PT Jantra Swarna Dipta, in collaboration with Permata Bank, presents a new solution for foreign nationals…

President Prabowo in Thailand

Rabu, 21 Mei 2025 - 10:09 WIB

Indonesia, Thailand Sign MoU on Health Sector, Focusing on Global Capacity, Collaboration

As a part of President Prabowo Subianto’s official visit to Thailand, both countries signed a Memorandum of Understanding (MoU) on health sector, in an effort to strengthen bilateral cooperation…

President Prabowo in Thailand

Rabu, 21 Mei 2025 - 10:06 WIB

Indonesia, Thailand Deepen Cooperation on Security, Trade, and Regional Stability

resident Prabowo Subianto has reaffirmed Indonesia’s strong commitment to deepening bilateral relations with Thailand during the meeting with Thailand’s Prime Minister Paetongtarn Shinawatra…

SD Darmono CEO Jababeka Group with Boediman Widjaja CEO JOE Green Group

Selasa, 20 Mei 2025 - 12:44 WIB

Boediman Widjaja's Technology Ready to be Adopted in Jababeka Industrial Estate (KIJA)

In an exclusive seminar entitled "A Great Step: Boediman Widjaja Story - Going from Indonesia, Thriving in Singapore" held at the President Lounge, Menara Batavia, Boediman Widjaja, Founder…

A total of 55 health professionals who participated in the Binawan Europe program, in the form of international career development scholarships in Austria. (Photo: The Public Relations of Binawan University)

Jumat, 02 Mei 2025 - 10:46 WIB

Binawan and Government Support Indonesian Nurses in Europe through Scholarships

In the midst of the viral #KaburAjaDulu hashtag as a symbol of the young generation's disappointment with domestic working conditions, Binawan responded with real action: dispatching Indonesian…