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    BI Domestic Financial Market Stabilization


    BANDUNG- Indonesia Bank decided to raise the BI 7-day reverse repo rate (rrr) by 25 bps to 5.50 percent, deposit facility by 4.75 percent and lending facility 6.25 percent. This was done to maintain the attractiveness of the domestic financial market and control the current account deficit within safe limits.

    The head of the Economic Advisory and Development Group, Ismet Inono said only Depok City had an inflation of 0.42 percent while other regions experienced deflation, especially Tasikmalaya reaching 0.37 percent.

    Ismet revealed that based on BPS reports in West Java, inflation in Depok is a long time effect. The recording of education subgroups that should have appeared in July and carry over in August caused quite high inflation. Thus, there is cooperation with DKI Jakarta to maintain supply stability and prices.

    "We also encourage the village to care about inflation and jointly encourage the optimization of the warehouse receipt system (srg) including the expansion of the scope of integration with the commodity auction market (pkl)," he told reporters at the West Java BI Office on Friday (09/09/2018).

    Ismet explained, the condition of West Java was still maintained which was reflected in an increase in banking intermediation. At the beginning of the third quarter of 2018, banking intermediation showed improved conditions.

    "These conditions are driven by an increase in the ratio of debt and deposits, from the payment system seen in non-cash transactions, especially through clearing," he said.

    While on the cash side, West Java experienced net inflows according to characteristics.In July 2018, location and project credit growth reached 10.51 percent (yoy), the bank's load to deposit ratio (ldr) increased by 92.75 percent from the end of the second quarter 2018 amounting to 92.41 percent.

    "The risk shows a decrease in the project location NPL ratio of 3.37 percent," he added.

    The economic outlook is expected to increase from 5.4 percent to 5.8 percent (yoy) during 2018, this figure is higher than 2017 which was 5.29 percent (yoy).

    "IHK inflation in 2018 is estimated to be within the national inflation target range of 3.5 percent or less 1 percent (yoy), assuming that there is no increase in administered prices," he concluded. (jo)

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