We like the simple way that BI presents their stats and descriptions which allow (well kind of) almost anyone to understand the current state of the economy.
The Banks main instrument for assisting the economy is the interest rates which on 22nd July they agreed to keep at 3.50% for the 7 Day Reverse Repro rate, 2.75% for Deposit Facility and 4.25% for Lending Facility. The objective being to maintain exchange rate and financial system stability given elevated global financial market uncertainty amidst. Projected low inflation and impacted by the pandemic.
The 2021 Outlook is still optimistic with growth at 3.25%-4.3%, current account deficit at 0.6%-14% of GDP and inflation still in target range of 3% + 10%.
The Global Economy recovery is expected to exceed previous predictions despite the recent uptick of Global financial market uncertainty in response to the Delta variant rapid spread Forecast 5.8% (yoy).
The Domestic Economy is predicted to have lower growth than previously expected given the emergence of the Delta variant.
The Balance of Payments is expected to remain solid reinforcing external sector resilience.
The Exchange Rate has remained under control under BI’s stabilitation measures, despite increasing global financial market uncertainty, only dropping 0.29%.
Interest Rates have dropped due to low policy rates and loose ongoing rigidity. The override interbank rate fell to 2.99%. The Bank Deposit Rate to 3.60% and Prime Lending rates to 5/86%.
Bank Indonesia continues to optimize its policy mix towards maintaining macro economic and financial system stability while supporting efforts to improve the national economy.
Given the security of the current situation from a Health and Mobility point of view, we are …….that the economy continues to be relatively stable and will be able to quickly recover when cases have reduced the manageable levels.