BI Governor Satirizes IMF: You Are Smart But We Are More Experienced

Governor of Bank Indonesia (BI), Perry Warjiyo. (Photo: Doc. Antara)

JAKARTA – Governor of Bank Indonesia (BI) Perry Warjiyo said that almost all emerging market countries face a policy trilemma in dealing with the current global dynamics.

According to Perry, the domination of developed countries such as the United States (US) and the European region is still strong and quite influencing developing countries.

“Of course the United States is having a hard time dealing with inflation with one interest rate policy, it's taking a very long time, and now it's recession. Europe inflation is very high. He said the Fed fund rate (US interest rate) will end, but there will be one or two more increases. Why? Because it only uses one instrument to solve the problem. It can't be," he said in a series of agendas for the ASEAN Finance Ministers and Central Bank Governos Meeting (AFMGM), Tuesday, August 22.

Perry explained, if the latest developments make the concept of a trinity policy that is impossible possible in emerging markets.

This is then called the global spillover impact which needs to be responded to through steps to maintain financial stability in order to support economic growth.

"Monetary policy does not only use interest rates, but also exchange rate policies and financial market policies," he said.

"We don't care what the IMF says about what we are doing. We know you (IMF) are smarter, but we are more experienced. You may think smarter, but we are more experienced. We also use macroprudential monetary and fiscal policies," said Perry.

For information, a number of policies pursued by Bank Indonesia have had a positive impact on the economy.

One of the most obvious is BI's effort to control inflation through mix policy that is aligned with the government.

It was noted that the central bank succeeded in reducing inflation from previously reaching 5.51 percent year on year (yoy) in December 2022 to 3.53 percent yoy in June 2023.