JAKARTA (TheInsiderStories) – Indonesia central bank praised the Federal Open Meeting Committee (FOMC) to raises the Fed Fund rate. Last night, after a long awaited, FOMC raised the federal funds rate by 25 basis points.
This was the first rate hike in more than nine years—and seven years since rates were pushed to zero.
Senior Minister for Economic affairs Darmin Nasution commented, the Fed decision it has been included in the calculation of the market and should not give longer impact to the market.
Deputy Governor BI Ronald Waas stated, several analysts saw the FOMC decision as a signal the United State (US) economy has recover. He believed that all the stakeholders prepared their-selves to anticipate the policy.
“This is a big decision that has been waiting for long time. From analysis I’ve been read several analyst showed this as positive signal for the global economy,” He said at the Signing Agreement between BI and Finance Ministry on Thursday.
Even though, Ronald said, pressure from economy of China and domestic still on. China economy is predicted keep slowed following the pressure form commodity prices will affect Indonesia economy.
Meanwhile, BI Governor Agus Martowardojo predicted FOMC would gradually increase the Fed Fund rate and will ended to 3,625% by end of 2016. He sees there is a window capital reversal from the emerging market to U.S based on the decision.
“It was high and a reversal of capital could have an impact on developing countries, especially for the countries that the transaction goes deficit,” Agus said.
He said, another challenging will from China, after picked as a new currency on Special Drawing Rights (SDR) of International Monetary Fund (IMF). The decision, Agus said, will give impact to other major currencies such as Japan Yen and South Korean Won.
“There is a possibility currency war in the global financial market. That’s why we need to keep our tight monetary policy to guard our economy to face this situation,” He stated.
While, Chairman of State Owned Bank Association Asmawi Sjam adding, the Fed decision has give certainty in the market and could help Indonesian banks to calculate the business with more accurate.