Indonesia c.bank: do not expect aggressive rate hikes like Fed

JAKARTA, Sept 7 (Reuters) – Indonesia’s central financial institution governor Perry Warjiyo stated on Wednesday that the benchmark rate of interest was set to rise additional, however to not count on coverage tightening to be as aggressive because the U.S. Federal Reserve.

“If I say BI (Financial institution Indonesia) charge will not rise, I will be mendacity. But when I say BI charge will likely be raised just like the Fed, I am going to even be mendacity,” Warjiyo informed a briefing with reporters.

“Please do not suppose we will likely be aggressive just like the Fed,” he stated.

BI raised borrowing prices by 25 foundation factors final month for the primary time since 2018 after the benchmark charge (IDCBRR=ECI) had been at a report low of three.50%, in a transfer some economists imagine was taken in anticipation of a current hike in authorities subsidisied gas costs. [nL1N2ZY0CR[ read more

The high subsidy budget had kept a lid on the inflation rate even when global policymakers including the Fed have been hiking rates at a furious pace over the past several months.

BI would update its forecast for core inflation and inflation expectations in the wake of the fuel price hike at its September policy meeting and determine the appropriate policy response, Warjiyo told the briefing.

The government has predicted inflation will hit a rate of 6.6%-6.8% for 2022, compared with the August rate of 4.69%, which was already near a seven-year high and above BI’s target for a third straight month due to rising food prices.

Reporting by Gayatri Suroyo
Editing by Ed Davies

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