Bank Indonesia noted capital inflows Rp189 trillion (US$13.3 billion) until Sept. 20 - Photo by the Central Bank Office

JAKARTA (TheInsiderStories) – Bank Indonesia (BI) noted capital inflows worth of Rp189 trillion or US$13.3 billion until Sept. 20, the governor Perry Warjiyo told media today (09/20). Most of the funds goes to government bond.

He elaborated, as much as Rp130.9 trillion of the foreign capital flew into government bonds. Then into stock market and corporate bonds worth of Rp56.8 trillion and Rp2.3 trillion, respectively.

In this month, he predicted there will be a deflation around 0.19 percent and the annual inflation 3.48 percent based on the central bank’ price monitoring survey until the third week of September. The deflation occurred by falling prices of red chili by 0.21 percent and onions by 0.07 percent, he adds.

Until the end of the year, Warjiyo still optimistic that the country’ inflation stay at 3.5 percent plus minus 1 percent. The same level also occurred next year.

Last month, Indonesia booked 0.12 percent inflation, easing from a 0.31 percent gain in the prior month, particularly due to an increase in prices by the most indexes of the expenditure group, Statistics Indonesia announced.

While annual inflation rate increased to 3.49 percent in August from 3.32 percent in the previous month, and the inflation rate for the calendar year (January-August) is 2.48 percent. This was the highest inflation rate since December 2017.

Furthermore, annual core inflation came in at 3.30 percent, the highest since March 2017, and the core component in August experienced inflation of 0.43 percent. The inflation rate for the core calendar year components (January-August) is 2.32 percent.

“In August there was an inflation of 0.12 percent with the consumer price index of 138.75. Of 82 cities, 44 cities experienced inflation and 38 cities experienced deflation,” the head of bureau Suhariyanto said in Sept. 1.

While, in the governor views, in the third quarter of 2019, Indonesia’ economic growth at 5.1 percent supported by the consumption sector. Previously, finance minister Sri Mulyani Indrawati claimed the country’ economic growth closed at 5.08 percent.

On the monetary policy, Warjiyo revealed, the policy was consistent with inflation forecast and the investment returns on domestic financial market still attractive. In addition, the decision taken as pre-emptive stepped to guard the economic growth.

As known, on Thursday, the central bank cuts its BI Seven Days Reverse Repo (BI-7DRR) rate 25 basis points to 5.25 percent. Deposit Facility interest and Lending Facility Interest rate also cut by 25 bps to 4.5 percent and 6 percent, respectively.

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