Indonesian central bank ready with liquidity injection to shore up economy

Source: Xinhua | 2020-05-07

Governor of the Indonesian central bank Perry Warjiyo pledged on Wednesday that the lender would provide more liquidity required to accelerate the economic growth, citing that the key rate is prioritized to guard rupiah.

Warjiyo pointed out that currently liquidity injection is effective to support the economic growth which has been ravaged by the novel coronavirus pandemic.

"We are ready (to inject more liquidity)," he said.

Warjiyo cited that the economic growth may plunge this year, as he conceded that the first quarter's gross domestic product (GDP) growth of 2.97 percent was below the estimate of the central bank, Bank Indonesia.

"For the short term, the key rate policy is prioritized to maintain the rupiah stability, albeit there is a room for reduction," said Warjiyo.

Last month, Bank Indonesia refrained from cutting further its benchmark interest rate and kept it steady after slashing 50 basis points earlier this year.

Warjiwo said that the decision aims at maintaining the stability of the Indonesian currency amid the global financial market uncertainty.

The novel coronavirus disease (COVID-19) outbreak has forced the Indonesian government to revise down the country's economic growth target to 2.3 percent this year, from 5.02 percent last year.

The COVID-19 outbreak has claimed 895 lives with 12,438 infection cases across Indonesia, spokesman for the COVID-19 Related Matters Achmad Yurianto announced on Wednesday.