Surprisingly, board governors of Bank Indonesia lowered the seven days reverse repo rate by 25 basis points to 3.75 percent, the deposit facility rate to 3.00 percent, and lending facility rate to 4.50 percent - Photo by BI Office

JAKARTA (TheInsiderStories)Foreign capital inflows reached Rp195.5 trillion or US$13.86 billion up to Oct. 10, said Bank Indonesia (BI) governor on Friday (10/11). Most of funds, he adds, went into government bond of Rp140.6 trillion and stock market Rp52.9 trillion

BI governor Perry Warjiyo asserted, the inflows data showed that Indonesian economy quite good and yields of the government bond still attractive. While, the flows to portfolio investment still volatile because the fluctuating of global economic conditions.

On the inflation rate, he predicted the rate in October at 0.04 percent. As for annual inflation could reach 3.15 percent, lower than September’ level which reached 3.39 percent.

“The inflation is in accordance with the development of prices until the second week and based on a survey of Bank Indonesia price monitoring,” he told media at his office.

The contributors to inflation, said Warjiyo were meat price 0.3 percent, tomatoes 0.01 percent, and cigarettes 0.01 percent. Beside, the commodities price experiencing deflation, such as red chili deflation 0.06 percent, cayenne pepper 0.03 percent, chicken eggs 0.03 percent, also shallots, air freight, oranges, and potatoes had deflation of 0.01 percent.

Broadly speaking, he concluded that the price development at the second week of October was still low and under control. He still optimistic that the the inflation rate will be below the target around 3.5 percent or even lower by the end of this year.

Last September Indonesian inflation stood at 3.39 percent compared to previous year (YoY) at 3.49 percent. The figure means inflation is comfortably within the central bank’ estimated range at 2.5-4.5 percent.

Head of Statistic Indonesia Suhariyanto said, lower prices of eggs, unions, chili and chicken, helped the monthly CPI index to declined by 0.27 percent. Then, annual core inflation, which exempt government-controlled goods and volatile food prices, inched up to 3.32 percent in September from 3.30 percent in August.

The government and BI ensured that the 2019 inflation rate remains within the target. Coordinating minister for economic affairs Darmin Nasution assured that both parties have inventoried several challenges in order to achieve the 2019 inflation target, including the potential for long droughts and the challenge of maintaining inter-time and inter-regional staple food availability.

The solution, adds by the minister, the government is committed to maintaining the volatile foods contribution to inflation rate at a maximum of 5 percent. In the long term, he continued, creating ecosystems that support the realization of staple and inter-regional staple food availability.

Then, maintain price affordability, supply availability, smooth distribution, and effective communication. In the National Inflation Control Roadmap 2019-2021, the policy is pursued by giving priority to availability of supply and smooth distribution, which is supported by a more conducive ecosystem and the availability of accurate data.

Going forward, Nasution revealed, the government at the central and regional levels also the central bank will continue to strengthen policy coordination to bring inflation in a downward trend in the range of 3±1 percent in 2020 and 2021, so it can support strong, sustainable, balanced and inclusive economic growth.

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