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WB says Indonesia can maintain neutral rate policy, no massive outflows
Source: Xinhua   2018-04-12 20:33:09

JAKARTA, April 12 (Xinhua) -- The World Bank said on Thursday that Indonesian central bank still have rooms to keep its benchmark interest rate unchanged as the international lender forecast there will be no huge amount of capitals exiting from the country amid the normalization program in advanced nations.

Senior Economist of World Bank Derek Chen said the central bank does not need to raise the rate in the near future as the country's rupiah has tended to be relatively stable against the U.S. dollar and performance of the country's bond market remains good.

"There will be no massive capital outflows in Indonesia. BI (Indonesian central bank) will keep maintaining (steady) interest rate," he said.

Chen made the remarks amid concern over outflows of capitals from emerging economies as the U.S. Federal Reserve has tighten its monetary policy and plans to do so in the rest of months this year.

On economy, the economist said Indonesia will witness a 5.3 percent gross domestic product growth this year, which is supported by household consumption and investment.

The Indonesian central bank had cut 2 percentages of its benchmark interest rate to 4.25 percent from the start of 2016 until August 2017 to help spur economic growth. The lender has maintained a neutral policy since September last year and admitted to conduct intervention to the financial market in recent months to restrict rupiah volatility.

The Indonesian government expects the economy to expand 5.4 percent this year after growing 5.07 percent last year.

Editor: ZX
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WB says Indonesia can maintain neutral rate policy, no massive outflows

Source: Xinhua 2018-04-12 20:33:09
[Editor: huaxia]

JAKARTA, April 12 (Xinhua) -- The World Bank said on Thursday that Indonesian central bank still have rooms to keep its benchmark interest rate unchanged as the international lender forecast there will be no huge amount of capitals exiting from the country amid the normalization program in advanced nations.

Senior Economist of World Bank Derek Chen said the central bank does not need to raise the rate in the near future as the country's rupiah has tended to be relatively stable against the U.S. dollar and performance of the country's bond market remains good.

"There will be no massive capital outflows in Indonesia. BI (Indonesian central bank) will keep maintaining (steady) interest rate," he said.

Chen made the remarks amid concern over outflows of capitals from emerging economies as the U.S. Federal Reserve has tighten its monetary policy and plans to do so in the rest of months this year.

On economy, the economist said Indonesia will witness a 5.3 percent gross domestic product growth this year, which is supported by household consumption and investment.

The Indonesian central bank had cut 2 percentages of its benchmark interest rate to 4.25 percent from the start of 2016 until August 2017 to help spur economic growth. The lender has maintained a neutral policy since September last year and admitted to conduct intervention to the financial market in recent months to restrict rupiah volatility.

The Indonesian government expects the economy to expand 5.4 percent this year after growing 5.07 percent last year.

[Editor: huaxia]
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