Indonesia central bank gov says signs of inflation pressure may be seen in Q4

JAKARTA: Indonesia's central bank said signs of inflation accelerating might be seen in the fourth quarter but the bank would not immediately raise interest rates in response, Governor Perry Warjiyo said on Monday.

Warjiyo told a briefing of senior editors the exit policy from monetary stimulus would probably start with Bank Indonesia mopping up excess liquidity, while interest rates would stay low until policymakers deemed there was a risk of high inflation.

BI cut interest rates a total of 125 basis points and pumped more than $50 billion of liquidity into the financial system last year to help the economy weather the impact of the coronavirus pandemic.

This year, BI has bought 25.9 trillion rupiah of bonds, Warjiyo said.