Sri Mulyani Reveals The Key To The Success Of The Government And BI Inflation

Minister of Finance Sri Mulyani (Photo: Capture the screen of Indonesia's UOB Youtube)

Minister of Finance (Menkeu) Sri Mulyani Indrawati emphasized that the government and Bank Indonesia are working well together so that Indonesia becomes a successful country to reduce inflation.

Indonesia is one of the successful in reducing inflation without making its economy have to dim because interest rate is rising too extreme. This is because fiscal and monetary, the government and the central bank are working well together," he said, quoted on Friday, June 2.

According to the Minister of Finance, the government and Bank Indonesia agreed to consistently maintain inflation in 2023 in the range of 3 percent plus minus 1 percent to accelerate the national economic recovery in the midst of the potential for future inflation risks.

"In Indonesia, when it comes to inflation, we say 3 percent plus minus 1 percent is in the state budget and is an indicator of the central bank," he said.

The state treasurer explained that there are several strategic steps taken to maintain inflation through strengthening coordination at the central and regional levels, such as strengthening policy coordination to maintain macroeconomic stability and encouraging the momentum of national economic recovery.

Furthermore, the Minister of Finance also emphasized that the government and Bank Indonesia need to maintain price component inflation regulated by the government or administrative prices and inflation of volatile food components, especially during the National Religious Holidays so that by the end of the year it is in the range of 3 percent to 5 percent.

So for Indonesia, dealing with inflation doesn't always have to use a monetary policy. Therefore, the Governor (Bank Indonesia) raised the interest rate not as high and as extreme as other countries' central banks, but Indonesia's inflation fell. For what reason? Because we handle it from the government side, the (volatile) food side, and the administrative price," he said.

For information, controlling inflation is one of the short-term policies aimed at building a solid foothold in realizing the development agenda and community welfare. The government, both central and regional, and Bank Indonesia needs to continue to collaborate in maintaining price stability, as well as ensuring smooth distribution and supply of essential commodities.