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

Oil Palm (agroindonesia)

Senin, 16 Juli 2018 - 21:41 WIB

Sign MoU, RI-India Palm Oil Industry Agreed on Sustainable Development

Monday (16/7/2018) has signed Memorandum of Understanding (MoU) between Indonesian Palm Oil Board (DMSI), India Solvent Extractors Association (SEA), and Solidaridad Network Asia Limited (SNAL)…

Irfan Bachdim officially become Brand Ambassador Super Moto Car (Photo: Ridwan / Industry.co.id)

Senin, 16 Juli 2018 - 21:39 WIB

Mobil Lubricants Launches Latest Product For Two Wheel Vehicles

Mobil Lubricants launches the latest high-performance oil products for two-wheeled vehicles, Super Moto Cars formulated using the latest oil technology that uses a unique blend of high-quality…

Illustration of Export (ist)

Senin, 16 Juli 2018 - 21:38 WIB

Indef Estimates Trade Balance June 2018 Surplus Up to US $ 600 Million

Institute for Development of Economics and Finance (Indef) estimates the trade balance in June 2018 to surplus US $ 400 million - US $ 600 million Surplus is expected to occur due to long holiday…

Wika Beton

Senin, 16 Juli 2018 - 21:36 WIB

Until June 2018, Wika Beton Records Total Contracts Reach Rp8, 45 Trillion

PT Wika Beton Tbk recorded total contracts to be handled (carry over) in the first six months of this year has reached Rp8, 45 trillion.

Airbus A320-200 AirAsia Indonesia Berlogo Wonderful Indonesia and with Indonesia Tourism Destination Pattern (Photo: Chodijah Febriyani / Industry.co.id)

Senin, 16 Juli 2018 - 21:34 WIB

Air Asia Purchases Airbus Plane Rp 330.7 Trillion

Airbus SE is reportedly approaching an aircraft sales agreement worth US $ 23 billion or equivalent to Rp 330.74 trillion to AirAsia Group. The Malaysian airline has been the second largest…