Governor of BI Shares Recipe for Controlling Inflation in Difficult Times to ASEAN Colleagues

JAKARTA - The Governor of Bank Indonesia (BI) Perry Warjiyo said, the central bank in Indonesia has close cooperation with the government in overcoming rising inflation.

According to him, the strategy is carried out in the form of a policy mix or mix policy.

"The pandemic situation requires extraordinary policies. That is why we are strengthening cooperation with the Ministry of Finance," he said at the ASEAN Finance Ministers and Central Bank Governors Meeting (AFMGM) seminar in Jakarta, Tuesday, August 22.

Perry explained, Bank Indonesia together with the central government and regional governments formed a joint team tasked with maintaining and controlling inflation in order to achieve the set targets.

"We realize that inflation is not only a demand and supply issue, but also a distribution problem. Based on that, we formed the Central/Regional Inflation Control Team (TPIP/TPID)," he said.

Perry revealed that this team was directly commanded by the President, which was then handed down to officials under him in stages, starting from the Coordinating Minister for the Economy, related ministries/agencies to local governments.

"This is what then mobilizes food distribution directly. For example, how there are lots of rice stocks in East Java but different things happen on Sumatra Island. We then carry out the distribution. This is very effective (to reduce inflation)," he said.

VOI noted that until the end of June 2023 general inflation (consumer price index/CPI) was known to be 3.53 percent year on year (yoy).

This level is included in this year's target of 3 percent plus minus 1 percent.

The target for CPI inflation in 2024 is 2.5 percent plus or minus 1 percent.

Just so you know, general inflation had touched its highest level in December 2022 by perching at 5.51 percent yoy.

The bookkeeping occurred as a result of the effect of soaring commodity prices accompanied by an increase in fuel prices in the previous September.