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JAKARTA, Feb 11 (ANTARA): Bank Indonesia will continue to applying a tight monetary policy in the coming several months as the expectation of inflation is still high, according to Bank Indonesia Governor Burhanuddin Abdullah.
Speaking to reporters after opening the Investor Relation Unit (IRU) at the central bank building here early this week, he said that by applying the tight monetary policy, Bank Indonesia still sticks to the Bank Indonesia rate of 12.75 per cent.
The Indonesian macro-economy has regained its stability, though the inflation rate in January 2006 remained high as a result of an increase in the rice price and the government's plan to raise the electricity basic tariff, he explained.
The expectation of inflation also remains high in 2006 due to the high oil price on the world market and the low growth of the global economy, despite the rupiah strengthening in the past several months, he said.
Such a favourable condition has prompted the central bank to continue the implementation of the tight monetary policy, he added.
The quite large difference between the 12.75 per cent Bank Indonesia rate and the interest rate currently effective abroad will attract foreign funds, he explained, and went on to say that the inflow of foreign funds is estimated to be very big, fostering the further strengthening of the rupiah position to the present exchange rate of Rp9,180 per US dollar.
The opening of Investor Relation Unit as a common programme of Bank Indonesia and several ministries is intended to expand the information access, besides developing intensive and sustainable relations between the government and investors.
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