The Risk of Behind the Curve
Monday, 27 June 2022
Holding interest rate when external conditions are volatile would neither maintain the stability of the rupiah nor hold inﬂation at bay.
AS the market has predicted, Bank Indonesia (BI) holds on to its interest rate, which remains at 3.5 percent. The reason being, as quoted from the central bank’s oﬃcial explanation: “...This decision is in line with the need to control the inﬂation and to stabilize the exchange rate, as well as boosting economic growth under external pressure regarding the risk of stagﬂation in various countries...”
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