MACROECONOMIC ANALYSIS SERIES: BI Board of Governor Meeting, December 2019

The latest picture of inflation confirms that 2019 inflation will remain low. We also see that the 2020 inflation to be within BI’s lower goal of 3.0±1%, given the signs towards no-significant change in 2020 demand. BI has started its accommodative stance in July 2019 and has cut its policy rates four times. The easing trend needs to take a break for now since BI would like to accumulate more international reserves amid the short-term consolidation in the global financial market. Liquidity in the banking system has increased slightly. However, the business activities have not fully responding as production has not picked up. We could see a slight increase in the credit growth starting from 2020Q3.

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