MACROECONOMIC ANALYSIS SERIES: BI Board of Governor Meeting, November 2021

The latest development has been quite eventful. The combination of massive stimulus injection in the past and sooner-than-expected rise in aggregate demand has pushed countries to curb the inflationary pressure by applyingmonetary tightening, and one of those countries is the US, which officially started its tapering off earlier this month. On the domestic side, daily cases of Covid-19 is being managed well lately and create a new momentum for economic rebound. Any disruption to the real sector revival is the last thing we want. Considering these factors, any monetary easing might amplify the flows of capital reversal and we are nowhere near to implement monetary tightening; lest we would harm the real sector recovery. Thus, keeping the policy rate at 3.50% shall be appropriate.

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