ASEAN KEY DESTINATIONS
BI urges local govts to maintain stable commodity prices
Bank Indonesia (BI) Governor Agus Martowardojo said on Wednesday that it was expected that local administrations would set aside a certain amount in their 2016 regional budgets (APBDs) for market operations, in an effort to maintain price stability, especially regarding prime commodities.
“To local administrations, maybe in the APBD 2016, they can allocate a budget for market operations so that price stability can be realized and people can avoid suffering due to continuous increases in commodity prices,” he said as quoted by Antara news agency in his remarks at the opening of the Sixth Regional Inflation Control Team (TPID) national coordination meeting in Jakarta on Wednesday.
Agus added that several obstacles in the real sector had caused price instability in Indonesia, which eventually led to high inflation.
One of the obstacles, the governor said, was domestic production capacity, which was still relatively low, and farmland, which had continued to decrease.
“Let’s protect our land so that land conversions for non-agricultural purposes such as settlements will not happen again,” said Agus.
He further said that another factor that had caused price instability was the rupiah exchange rate, which that was still prone to external fluctuations.
“Our dependency on raw material exports is still high. We hope that the process to give added value to our commodities can be increased,” said Agus, adding that climate impacts must also be anticipated as they could lead to price instability.
BI is optimistic that its 4 plus-minus-1 percent inflation target in 2015 can be achieved.
“We are certain that this year’s inflation will be relatively controlled. However, our inflation is still relatively higher than other countries in the region,” said Agus.
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