BI Governor Describes Indonesia’s Economic Prospects in Guest Lecture

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UNAIR NEWS – Governor of Bank Indonesia (BI) Perry Warjiyo, Ph.D., gave a guest lecture at the Garuda Mukti Hall, 5th Floor, Management Office Building Campus C, Universitas Airlangga, on Monday, March 25, 2019. The lecture was on “Indonesian Economy: Prospects and Policy Mix”.

In the guest lecture, Governor of Bank Indonesia (BI) Dr. Perry Warjiyo, Ph.D., delivered three main messages especially regarding key issues of Indonesian nation to face economic challenges in the future.

First, he continued, building an optimistic attitude towards Indonesian economy in the future would be better. This trust is able to build economic growth higher with maintained macroeconomic and financial system stability.

“Indonesia’s economic resilience to global propagation is quite strong,” he said.

Second, the synergy of national economic policies is very strong. The synergy of fiscal-monetary-financial sector policy is needed for stability. In addition, growth is supported by structural reform policies in various fields. For example, infrastructure, human resources, industry, tourism, UMKM, and the digital finance economy.

“Bank Indonesia supports growth with accommodative policies in the field of macroprudential, financial market deepening, payment systems, and Islamic financial economics,” he said.

And, third, said Dr. Perry, consistency and continuity of policy in the future is needed. The strong synergy of national economic policies, said Perry, needs to be maintained.

“Economic management needs to be carried out both in terms of aggregate demand and supply so economic growth is higher and stability is maintained,” he said.


Rupiah exchange rate

Dr. Perry also said that rupiah exchange rate is strengthened in line with the improving performance of external sector. Until March 19, 2019, he said, rupiah strengthened 1.05 percent on a point-to-point basis and 0.85 percent on average.

It was supported by the large inflow of foreign capital to the domestic financial market. Both in the market for Government Securities and the stock market. Perry also views that rupiah exchange rate will be stable in the future.

“In the future, in line with the prospect of improved external sector, Bank Indonesia views rupiah exchange rate will move stably in accordance with its fundamental value with a market mechanism that is well maintained,” he said.

To support the effectiveness of exchange rate policies and strengthen domestic financing, continued Dr. Perry, Bank Indonesia continued to accelerate financial market deepening especially in money and foreign exchange markets.

In the end, Perry stated some decisions of Bank Indonesia Board of Governors’ (RDG) Meeting held on March 20-21, 2019. RDG decided to maintain a 7-day Reverse Repo Rate (BI7DRR) of 6.00 percent, deposit facility interest rate at 5.25 percent, and lending facility interest rate of 6.75 percent.

“The decision is consistent with efforts to strengthen the external stability of economy,” he said.

“Especially to control the current account deficit within a safe limit and maintain the attractiveness of domestic financial assets,” he added.

Meanwhile, Rector of Universitas Airlangga, Prof. Dr. Mohammad Nasih, SE., MT., Ak., CMA., in his speech welcomed the guest lecture positively. According to him, guest lecture activities are very important for the academic community to update knowledge especially from practitioners in certain fields.

“We hope that collaboration between UNAIR and Bank Indonesia can be improved and strengthened in the future,” he said.

“And we are very open to suggestions. It can be an adjustment on the curriculum model, as well as others, “he added. (*)


Author: Feri Fenoria Rifa’i


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