Economy & Business

BI Predicts Inflation Rate Will Continue to Increase
Tuesday, 13 September, 2005 | 19:26 WIB

TEMPO Interactive, Jakarta:Miranda Swaray Goeltom, the senior governor of Bank Indonesia (BI), has said that the inflation rate would increase to more than 8.33 percent by the end of this year.

“If fuel prices do rise, then inflation will definitely increase. We will try to prevent the increase from being too much,” stated Goeltom in Jakarta on Monday (12/09).

However, she declined to mention the steps to be taken by BI in order to keep the inflation rate down.

Earlier, BI had increased the BI Rate to 10 percent, after taking into consideration that the inflation rate would reach 9 percent in 2005.

Currently, the inflation rate has reached 8.33 percent.
Goeltom stated that the policy to tighten liquidity through the increase in the BI Rate to 10 percent and the increase in the bank account minimum balance banking minimum would lead to an increase in loan interest rates.

“However, loan interest is still reasonable,” she stated.

Goeltom said she hoped that this would not disturb the development of the real sector.

“This should be motivation for all of us to improve the economic situation together,” she stated.

Goeltom acknowledged that there were still some problems facing Indonesia’s economy, including high economic cost of and taxation policies which are not yet conducive.

“We have to settle this together,” she stated.
(Astri Wahyuni/RR Ariyani-Tempo News Room)