Jakarta - Steps of Bank Indonesia (BI) to stimulate economic growth by loosening monetary policy, was disrupted after the US Presidential election, which was won by Donald Trump. Bank Indonesia actually has room to cut interest rates in 2017, could not resist the panic that occurred in the global market, despite Indonesia’s economic fundamentals fairly stable.
However, the BI board of governors did not want to die steps, through national annual event bankers or better known Bankers Dinner, BI middle of counting the related Statutory policy primer (GWM) of banks. BI plans to enforce payment on the average reserve requirement or technically called averaging GWM to give flexibility to banks in managing their liquidity.
According to the Economist Bahana Securities Fakhrul Fulvian, BI’s plan will help banks in addressing the availability of liquidity compared to the currently applicable statutory reserves banks must pay on each end of the day. Liquidity by paying on average for a given period, banks have greater room for lending.
” With the enactment of the reserve requirement on average, will help to minimize fluctuations in interest rates on short term money market and provide flexibility for banks to maintain their liquidity, “said Fakhrul. ” So in the end the expected banks can be more active in lending because the availability of their liquidity more flexible, “he said. To practice, we are still waiting for the technical details of BI.
With more active banks to extend credit, will be a driving force for economic growth in Indonesia that the central bank could still grow between 5% - 5.4% next year. This estimate is in line with forecasts Bahana previously forecast the economy would grow by 5.4% in 2017, in line with the improvement in commodity prices will be a positive impact on export performance.
Meanwhile, in terms of investment, Indonesia is still a promising market for investors, especially the government continues its efforts to improve the investment climate. Just look at the middle of this year, the government has issued a revised Investment Negative List, as well as the economy ministry has given a new formula for the national minimum wage, so that investors already have the certainty to calculate the increase in labor costs in Indonesia.
Especially the end of last October, the agency upgraded the ratings of the World Bank ease of doing business rankings as much as 11 to 109 from the previous level of Indonesia at the level of 120. It shows the government consistently improve competitiveness in the country.
” Currently, the average 29 year-old resident of Indonesia, with a population growth rate of 1.6% per year, this data into a sweetener for investors to invest in Indonesia because this means that the level of consumption is still high, “said Fakhrul.