Governor of Bank Indonesia Perry Warjiyo estimated the inflation rate in April 2019 around 2.7 percent - Photo: Finance Ministry Office

JAKARTA (TheInsiderStories) – Bank Indonesia (BI) estimated the inflation rate in April 2019 around 2.7 percent, said the Governor Perry Warjiyo yesterday (04/23). This value is sourced from the Price Monitoring Survey in the third week of April, which was 0.31 percent on a monthly basis,

Going forward, BI remains wary of soaring inflation ahead of Ramadan and Eid al-Fitr. Therefore, the Central Inflation Coordination Team plans to hold regular meetings throughout the month of Ramadan to monitor price controls.

Warjiyo said that transportation tickets would be the greatest contribution of inflation ahead of Ramadan, mainly airplane tickets. However, the food price movements are still in monitoring because they are included in volatile food inflation on average always accounts for 20 percent of inflation.

Furthermore, BI saw foreign capital flows continue to enter the stock market and government bond. This is expected to reduce the current account deficit (CAD) in the 1Q of 2018.

“This year the CAD will lead to 2.5 percent of GDP. In the first quarter of 2019 this will likely be lower than the fourth quarter of 2018,” said Warjiyo.

Moreover, chairman of the Financial System Stability Committee Sri Mulyani Indrawati conveyed the financial system stability in the 1Q of 2019 in good condition, as seen from the monitoring of economic, monetary, fiscal, financial market, Financial Service Agency (FSA) and Deposit Insurance Corporation (DIC).

In the monetary sector, BI focused on the monetary policy which was maintained at 6 percent during the 1Q of 2019 and the exchange rate to strengthen on the external stability.

In the fiscal sector, she continued, the State budget expenditure performance generally shows a positive trend, both in terms of income and expenditure, with a budget deficit of 0.63 percent of GDP, to support the development target in 2019.

FSA also views that financial system stability is well maintained because of the support of capital levels, adequate liquidity and the support of risk levels that are still under control by prioritizing the level of prudence.

Meanwhile, DIC assessed that the increase in deposit interest rates in general has been sloping and stable, in line with the improving condition of banking liquidity, as well as the existence of guarantees and the number of adequate accounts to support banking confidence in the banking system.

Written by Staff Editor, Email: theinsiderstories@gmail.com

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