To Reduce Food Price Volatility, BI Optimizes The Work Of The Central And Regional Inflation Control Team

Illustration (Photo: Doc. Ministry of Finance)

JAKARTA - Bank Indonesia (BI) has stated that it will continue to build synergies with the Central and Regional Inflation Control Teams (TPIP and TPID) in keeping national inflation under control.

Bank Indonesia Governor Perry Warjiyo said that one of the focuses of work is optimizing inflation control measures from the supply side and encouraging production to support food security in an integrated, massive, and comprehensive manner.

According to Perry, Indonesia is currently facing various challenges, such as global economic uncertainty and the risk of stagflation.

"The synergy and joint steps that can be taken are aimed at controlling food inflation in 2022", he said in a press statement while attending the Synergy of the National Movement for Food Inflation Control (Gernas PIP) in Malang on Wednesday, August 10.

According to Perry, food inflation has a fairly large weight on the composition of public expenditure, so controlling inflation will have a large social impact on mutual welfare.

"Efforts to synergize between regions are needed to meet food shortages and increase production capacity as a measure to anticipate food security shocks", he said.

On the same occasion, a member of Commission XI of the Indonesia House of Representatives, Andreas Eddy Susetyo, said that collaboration between the central and regional governments is the main capital in overcoming the problem of inflation, which now tends to be a high trend.

"All stakeholders must also involve the community in encouraging the spirit of cooperation to control food inflation starting at the household level", he said.

Similarly, East Java Governor Khofifah Indar Parawansa said that her party supports price stabilization efforts and always synergizes to keep food inflation under control.

"It should be remembered that efforts to control food inflation require the implementation of real policies that can be felt directly by farmers and ranchers", she stressed.

As for the implementation of Gernas PIP in controlling inflation, Bank Indonesia and the provincial government, as well as TPID throughout Java, agreed to expand Inter-Regional Cooperation (KAD) through simultaneous market operations. Furthermore, the same activities will also be carried out in other provinces until the end of 2022.

To note, Bank Indonesia is the macroeconomic institution that is most concerned with the movement of the inflation rate. This is because the central bank has a monetary interest in maintaining the stability of the rupiah exchange rate.