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BI Board of Governor's Meeting, June 2022

Author

Listed:
  • Jahen F. Rezki

    (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))

  • Teuku Riefky

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

  • Amalia Cesarina

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

  • Meila Husna

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

  • Faradina Alifia Maizar

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

Abstract

Despite rising global inflationary pressures in most countries due to soaring global food and energy prices and supply chain disruptions, domestic inflation remains under control, mainly driven by supply-side inflation underpinned by higher Producer Price Index (PPI) inflation that has been above Consumer Price Index (CPI) inflation since 2020. Domestically, we are still on a recovery path with robust economic performance and continuing series of trade balance surplus. Externally, the global economic volatility has not subdued, bringing bleak prospects for the global economy. Consequently, many central banks had already moved toward a more “hawkish†stance by raising their benchmark rates and reducing asset purchases to curb elevated domestic inflation, including the Fed, which recently raised its FFR by 75bps. This phenomenon triggers a flight to quality and depreciation in EM countries. Rupiah has been depreciated to around Rp14,800. Considering domestic and external circumstances, BI should remain behind the curve for the time being by keeping its policy rate at 3.50% while maintaining accommodative macroprudential measures to support economic growth.

Suggested Citation

  • Jahen F. Rezki & Syahda Sabrina & Nauli A. Desdiani & Teuku Riefky & Amalia Cesarina & Meila Husna & Faradina Alifia Maizar, 2022. "BI Board of Governor's Meeting, June 2022," LPEM FEBUI BI Board of Governor Meeting Brief 202206, LPEM, Faculty of Economics and Business, University of Indonesia, revised Jun 2022.
    • Handle: RePEc:lpe:gomeet:202206
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    Keywords

    gdp — economic — economic outlook — inflation — macroeconomics — interest rate;

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