JAKARTA (TheInsiderStories) – Bank Indonesia (BI) lowering the country’ economic growth outlook from 5.1 – 5.5 percent to 5.0-5.4 percent in 2020, weighed by COVID-19, said the governor. The policymaker also sees the Southeast Asia largest economy only sprout 5.2 – 5.6 percent

In the first quarter of this year, the central bank sees Indoneia’ GDP growth at 4.9 from, lowered than last year at 5.01 percent. The Bank also rated the virus will give high impact to the global economy and bring the growth drops 0.1 percent from 3.1 percent to 3.0 percent.

In addition, he said, COVID-19 outbreak to put pressure on emerging market currencies and spur selling by portfolio holders. He reported, BI has conducted triple intervention post Covid-19 outbreak.

The governor also sees the full extent of the epidemic remains uncertain and weigh the international trade and may cut exports and imports by US$1 billion. In addition, the COVID-19 may curb and defer the foreign direct investment by $400 million.

Beside, the virus has affects the tourist arrivals and could cut foreign revenues from tourism sectors by $1.3 billion. In the midst of the coronavirus, the central bank maintains 2020 and 2021 current account deficit forecast at 2.5 – 3.0 of GDP

Talking on Rupiah performances, Warjiyo commented, BI has bought Rp61.5 trillion ($4.39 billion) of gilts during Jan. 1 to Feb. 19. But, he rated the local exchange rate weakening still measured.

In the banking sector, the central bank recorded, banks’ capital adequacy ratio landed at 23.3 percent at December from previous month at 23.7 percent. In December, the credit growth rose 6.08 percent from November at 7.05 percent, the deposit growth 6.54 percent versus 6.72 percent month to month, and gross non performing loans ratio at 2.5 percent from earlier at 2.8 percent.

In 2020, BI estimating the national bank’ credit growth around 9 – 11 percent from last year in the range 10 – 12 percent. The policymaker also maintained the deposit growth outlook at 8 – 10 percent.

At the meeting, the central bank just cut its seven day reverse repo rate by 25 basis points to 4.75 percent. The governors also reduce the deposit facility interest rate and lending facility rate by 25 basis points to 4.00 percent and 5.50 percent, respectively.

Warjiyo said in an official statement, the decision consistent with the central bank target to controlled the inflation within the target range, safe external stability, and as a pre-emptive step to maintain the momentum of domestic economic growth amidst the prospects of global economic recovery in connection with the occurrence of Covid-19.

He adds, the monetary operations strategy continues to maintaining adequate liquidity and supporting the transmission of an accommodative policy mix. Beside, accommodative macro-prudential policies were taken to encourage economic financing in line with the sub-optimal financial cycle while still observing the precautionary principle.

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