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BI Board of Governor's Meeting, March 2019

Author

Listed:
  • Febrio Kacaribu

    (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI))

  • Syahda Sabrina

    (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI))

  • Nauli A. Desdiani

    (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI))

  • Nisrina Qurratu’Ain

    (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI))

Abstract

Robust economic growth last year reflects sound domestic economic performance amidst the global uncertainty. Inflation has been relatively subdued and approaching the lower bound of BI’s target band of 2.5 to 4.5 percent. The trade balance surplus in February, the highest since September 2018, will contribute positively to the series of efforts for improving the current account performance. Although Rupiah trend of appreciation has slowly disappeared, with now hovering around IDR14.200, it remains safe and under control. In addition to the trade war uncertainties, the key challenge ahead is associated with the global economic moderation, causing the fall in commodity prices, which will affect trade balance. Bank Indonesia should retain a tightening bias until the government actions in taming the current account deficit starts showing some promises. On the upside, if the portfolio capital inflow continues strongly, and BI is projected to accumulate enough foreign currency res erves, we view that BI should have room to lower its policy rate this year by 50 bps. But for now, it is time to wait and see until next month.

Suggested Citation

  • Febrio Kacaribu & Syahda Sabrina & Nauli A. Desdiani & Nisrina Qurratu’Ain, 2019. "BI Board of Governor's Meeting, March 2019," LPEM FEBUI BI Board of Governor Meeting Brief 201903, LPEM, Faculty of Economics and Business, University of Indonesia, revised Mar 2019.
    • Handle: RePEc:lpe:gomeet:201903
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