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3/28/11

BI Rate 25 Bps Will Rise in Third Quarter?

Herdaru Purnomo - detikFinance

Jakarta; Make Money Blog$ - The inflation rate began to third-quarter 2011 willbegin again 'malignant' because before the fasting and Idul Fitri.The increase in inflation would push up interest rates or benchmarkBI Rate by 25 bps.


This was conveyed by Standard Chartered Bank economist EricSugandi in talk of Standard Chartered Bank Indonesia concerningthe economy related Middle East crisis and Japan at Crown PlazaHotel, Gatot Subroto, Jakarta, Tuesday (29/03/2011).

So inflation will reach its highest range in the second quarter of2011, so it will be influential to the BI Rate at end of second quarteror early in the third quarter even with the increase of 25 bps, "he added.

As for this March, Eric estimates that deflation will occur in the range of 0.1%. Since starting jinaknya food prices in the country.

"For March, we predicted deflation of about minus 0.1 percent,with 6.9% year on year," says Eric.

According to Eric, there are three factors that lead to deflation, which are some areas that have been signed in the rice harvest,the government policy of exemption of import duties on food commodities, and strengthening of the rupiah.

As for inflation during 2011, He added that inflation is predicted tobe on the level of 7% to government records do not make the fuel price hike and there are no restrictions on the consumption ofsubsidized fuel.

"And the world oil price was only U.S. $ 105 bpd. That's his down-side risk," he added.

With low inflation, the BI Rate to March 2011 will still stay at 6.75%."The rate of inflation and even deflation causes the BI Rate will notwaver at 6.75%," he said.
(Dru / dnl)
source: detik.com

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