Bank Indonesia ‘Confident’ Will Meet Inflation Target
Bank Indonesia is “confident” the country will meet the central bank’s inflation target this year, Senior Deputy Governor Darmin Nasution said today.
The projection takes into account rising prices and a recovery in the global economy, Nasution said in Jakarta. Consumer-price gains are expected to average 4 percent to 6 percent in 2010, he said Jan. 6.
Indonesia’s central bank kept its benchmark interest rate at 6.5 percent for a fifth month Jan. 6, saying it wasn’t concerned about inflation pressures in the first half. Consumer prices in Southeast Asia’s largest economy held near a decade low in December, giving the bank more time before it joins other Asian policy makers in raising borrowing costs fast cash now.
Indonesia’s inflation will probably be “relatively tame” at about 5.3 percent this year, Helmi Arman, an economist at PT Bank Danamon Indonesia, said in a research note Jan. 18. Economic growth will probably be “close to 5.2 percent,” Arman said in the note.
“The odds are rising for the BI rate to stay at 6.5 percent this year, which paves the way for a smoother recovery of commercial bank credit growth,” Bank Danamon said.