By Central Bank News
The central bank of Indonesia kept its main policy rate, the BI rate, steady at 5.75 percent despite rising uncertainty in the global economy. Bank Indonesia said the current rate was consistent with its inflation forecast, which is expected to remain low and within its target range in 2012 and 2013.
“Amid rising uncertainty in the global economy, Board of Governors views that the fundamental of Indonesia’s economy thus far, is well maintained,” Bank Indonesia said in a statement following a meeting of its Board of Governors.
The bank expects Indonesia’s economy to expand between 6.3 and 6.7 percent this year although it admits that risks are tiled toward the downside.
Indonesia’s growth is mainly supported by domestic demand and private consumption and investments are expected to remain strong. Exports, however, are affected by weak world demand and lower commodity prices.
“The prospect of global economy is still confronted with rising uncertainty and worsening crisis in Euro area, vulnerable US economic condition, and lower economic growth in China and India driven by crisis in Euro area,” the bank said.
The next meeting by Bank Indonesia’s Board of Governors in on July 12.
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