JAKARTA (TheInsiderStories) – The Government and Bank Indonesia (BI) agreed on three strategic steps to keep inflation within the target range of 3.5±1 percent in 2019, said the official on Tuesday (01/29).
Firs steps, the officials said, its to 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.
Second, strengthening the implementation of the National Inflation Control Roadmap 2019-2021 and also implementing the Roadmap for Inflation Control at the Provincial level. And third, strengthening the coordination of the central and regional governments in controlling inflation through the holding of the National Inflation Control Coordination Meeting.
According to the BI’s spokesman Agusman in a written statement, the inflation rate in the last four years has been positive. This is supported by the synergy of monetary and fiscal policies in managing healthy macroeconomic conditions and structural policies, including infrastructure development in various regions that improve connectivity and smooth distribution.
Going forward, 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.
Based on BI’ third week price monitoring survey result, January 2019’ inflation is estimated to be at around 0.5 percent month-on-month. While, annual inflation is projected at 3 percent.
The Bank said, low commodity price and controlled foodstuffs supply demand supports the small inflation. The central bank said does not see any worsening inflation risk ahead.
Governor Perry Warjiyo stressed that food supply and distribution is more than enough. Moreover, the central bank claimed a manageable Rupiah depreciation. He revealed, that BI will coordinate with the central and regional government to maintain low inflation.
Foreign inflow keeps coming to emerging countries like Indonesia. Until Jan. 17, there were Rp14.75 trillion (US$1.05 billion) foreign inflow entered almost all instruments. Government securities is the highest instrument penetration by foreign investors, with Rp11.48 trillion then Rp3.21 trillion entered stocks market.
The figure is still lower compared to the previous month. In December 2018, foreign inflow reached $1.9 billion. But Warjiyo believed that the continuing foreign inflow is due to Indonesia’ low investment risk and good domestic economy condition.
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