Indonesia Business part of My Business Blogging Channel

Since ten years a go (1997) till this year (2007) our country is still have been crisis in financial system. Government of Central Bank, Burhanudin Abdullah said that for this time Indonesia not yet finish to handle the financial crisis. This is an anomally for the good economic condition currently (www.antara.co.id). 

The anomally condition has been reflection by BI rate around 8,25 percent is more higher than deposit rate around 5 percent. In the normal condition and ideally, BI rate should be lower than deposit rate. 

For monetary stability and solving the trouble from the anomally condition right now, the central bank has been decreasing the BI rate step by step at 0,25 percent till below than deposit rate.  

The carefully decision by central bank to decrease the interest rate step by step is for avoid the cash outflow from Indonesia to the others country like New Zealand which giving 8 percent and Australia which giving 7,5 percent.  

If the central bank decreasing the interest rate directly to below than deposit rate, so maybe it will be influence quickly the moving of cash outflow to the other country. And If our investor moving theirs invest to the others country, it will be influence to Rupiah depreciation and so on the inflation will be increasing, finally will be increasing the interest rate too.

Topic: Economic Growth, Government, Invesment, News