Three Departments Of Bank Indonesia Anticipates The Impact Of The Fed's Policy In The Future

Press conference of the Board of Governors of Bank Indonesia Meeting (Photo: Capture BI Youtube screen)

JAKARTA - Bank Indonesia (BI) Governor Perry Warjiyo admits that the policy taken by the US central bank, The Federal Reserve (The Fed), will have its own bridge for the national economy.

Perry explained that the development of inflation in the US is still relatively high due to the increase in the price of labor wages.

"Indeed, there is a potential for the Fed terminal rate not 5 percent but 5.2 percent. Possibly, by the end of this year they will not lower their interest rates," he said during a press conference in Jakarta, Thursday, February 16.

So, what about Bank Indonesia's attitude? Perry explained that the monetary authority would respond with various strategic steps. First, efforts to stabilize the rupiah exchange rate.

"This is useful to keep imported inflation from having an impact in the country," he said.

Second, selling Government Securities (SBN) in the short term. This strategy is called the BI boss has the effect of keeping the SBN yield attractive.

"The second thing can support the entry of foreign portfolios into Indonesia. This also supports maintaining the rupiah exchange rate," he said.

And the third is the implementation of the Export Result Foreign Exchange (DHE) policy.

"Bank Indonesia will strengthen the management of foreign exchange export results through the implementation of the DHE foreign exchange monetary operation instrument in the form of a DHE foreign exchange term (TD) as an instrument for placing DHE by bank exporters to BI in accordance with market mechanisms starting to take effect as March 1, 2023," explained Perry.