Monetary Study Case

the case about tight money policy
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  BI: Tight Money Policy Will Depending Inflation TEMPO.CO, Jakarta - Executive Director of the Department of Economic Research and Monetary Policy Bank Indonesia Dody Budi Waluyo said Bank Indonesia will still be reviewed from time to time about the possibility of continuing tight monetary policy this year. He said the central bank continues to see existing developments, including the risk of future inflation, food problems until increase in electricity tariffs. Also in terms of current accounts as to what its development, from the all new judge will likely interest rate it wants what. What goes up, fixed, or down, we see the first development from time to time , said Dody after filling the Indonesia Investor Forum 3 , at the Jakarta Convention Center, Tuesday, January 21, 2014. He said some of these will be considered as a risk assessed there. The possibility of global influences such as Fed rate hike in the near future are also considered . Fed Rate Dody said if properly raised, the developing countries such as Indonesia will be affected. He also said that Bank Indonesia should consider the data from time to time to determine the probability of continued tight monetary policy or not. He said that the Board of Governors Meeting held last January 9, 2014, Bank Indonesia still sees the need for interest rates is maintained. However, Dody said 2014 is predicted inflation will decline , as well as the current account. He also said Bank Indonesia expects in 2014 the exchange rate against the dollar will be stable again.  Analysis Determination of a tight monetary policy in Indonesia by Bank Indonesia still consider to be continued or terminated. There are several factors that must be considered by the Bank before they set interest rates, such as inflation is related to the money supply, the development of the current account, the problem of food until the increase in electricity tariff. In addition, the global influence such as increasing Fed Rate should also be considered by the Bank because developing countries such as Indonesia may be affected. BI hope in 2014 the inflation rate and the current account may decline so interest rates can be maintained at lower and can accelerate economic growth.  Indonesia Still Need Tight Money Policy, JAKARTA - One of the causes of the economic slowdown are the tight monetary policy that is applied today. However, it CMEA related Chairul Tanjung not want to respond to whether it is time to Bank Indonesia loosen its policy. This will be discussed at a consultation meeting with the monetary authorities next week . I do not want to do a public announcement before the meeting took place, he said. He further explained that the current pace of monetary authorities is to address the current account deficit. As long as the government can not solve it, the tight monetary policy should be taken with the consequences of economic slowdown. However, this policy remains to be done with caution. Because if it is too long the economic slowdown will interfere with employment and poverty alleviation. Separately researchers from aspiration Indonesia Research Institute Yanuar Rizky assess tight monetary policy is still needed. If I said this economic policy is to control consumption and to anticipate a rate hike by the Fed , he said. He said that economic growth is driven by private consumption could potentially trigger a recall importation of consumable products mostly come from abroad. On the other hand, if the central bank lowers interest rates currently Indonesia's monetary burden when the Fed's interest rate rise in the next year will be more severe. Let us not be late to raise interest rates, he said.  Analysis Applicability of tight monetary policy in Indonesia still have to be considered carefully. Because of this policy if it continues in use can lead to slowing economic growth in Indonesia, but on the other side of the tight monetary policy is useful to anticipate the current account deficit and controlling consumption. The interest rate of the Fed should also be considered because if Indonesia really want to lower the interest rate to the current economic conditions, the Indonesian monetary burden will grow heavier in the coming year.
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