JAKARTA: Bank Indonesia will upsize the interest rate for monetary operations instruments to continue to absorb rupiah liquidity excess in order to lessen short-term inflation expectation.
Bank Indonesia Public Relation Head Difi A.. Johansyah said one of decisions on Central Bank Board of Governor meeting was to lift interest rate for monetary operations to lessen short-term inflation expectation caused by uncertainties on Europe economic crisis and fuel price hike cancellation.
“This will affect medium-long term interest rate structure which predicted to rise and could attract investment on domestic securities,” he said today, Thursday, May 10, 2012.
The monetary operations instrument includes Bank Indonesia Certificate, term deposits,deposit facility and reverse repo.
On the same day, BI Board of Governor meeting decided to keep the BI Rate at 5.75%.
"The BI Rate rise only has long-term effect. So as to tame short-term expectations we did not use BI Rate," he said.
Yet he hasn't know how much the monetary operations interest rate increase since it depends on open market auctions which was held at 2:00 p.m. (T07/faa)