JAKARTA- Indonesia’s central bank intends to review its normalization plan for monetary policy in May to June, and wants to assess any risks to the inflation outlook if the government changes energy prices and subsidies, Governor Perry Warjiyo told Reuters.
Central banks in some more advanced economies have started to tighten monetary policy to fight soaring inflation as the war in Ukraine pushes energy and food prices up and exacerbates global supply chain problems.
Bank Indonesia (BI) has pledged to keep interest rates at record lows until it sees signs of pressure on core inflation and has previously said interest rate levels would only be reviewed in the third quarter.
In an interview on Monday, Warjiyo said that when fiscal policymakers meet with parliament’s budget committee to review the 2022 budget between May to June, BI would monitor whether the government chose to raise prices of gasoline, LPG and electricity tariffs to control subsidies.
