Jakarta: The Central Bank of Indonesia focuses on the thrust of economic growth without compromising price stability, including the exchange rate, said a senior official on Wednesday, May 7, while the roupie was weakening again in the middle of the growing tensions between India and Pakistan.
In the current environment, the central bank will try to find the “optimal balance” between price stability and economic growth, said Juli Budi Winantya, administrator of the Department of Economic and Monetary Policy of Indonesia.
Current economic growth was still lower than the potential, but the objective of the central bank was to put pressure for growth without compromising stability, he told an economic seminar when it was asked for policy rate prospects.
The economic growth of the first quarter of Indonesia was 4.87%, the slowest in more than three years, but almost in line with market expectations, showed official data on Monday.
“We have to push economic growth more,” said Juli. “BI policy is to try to find an optimal balance between maintaining stability and growth growth.”
The latest BI growth prospects in 2025 for the largest economy in Southeast Asia were slightly lower than the beach from 4.7% to 5.5%.
It has reduced interest rates twice since September to try to stimulate economic activity, but has interrupted its softening cycle to focus on the maintenance of the stable roupine.
The central bank said that it would maintain its presence on the foreign exchange market to consolidate confidence, said the head of monetary management of bank Erwin Gunawan Hutapea separately.
The roupine has strengthened since it reached a historic hollow in early April, but weakened 0.55% Wednesday at 16,535 the dollar in an increase in geopolitical concerns in India and Pakistan and before the end of the examination of the monetary policy of the American Federal Reserve.
Erwin said foreign investors had started to buy Indonesian assets again, especially during the government's bond sale this week, which would support the Roupie, but he warned that the national needs of the US dollar for the repatriation of dividends and the payments of foreign debt could affect exchange rate movements in the coming months.
To support growth, BI has concentrated its open market operations on the expansion of liquidity, in particular by gradually reducing the level of current BI certificates (SRBI), said Erwin.
“We want BI operations to have an expansionary impact, supporting growth,” he said. “As part of this, we have gradually reduced the exceptional SRBI … Until now by 40 rumors of rupees since the end of 2024.”
The exceptional BI SRBI at April 21 was 881.86 Billions of rupees, according to the Central Bank website.
