Miranda: BI Rate Up It's Not Fun

Former Bank Indonesia Senior Deputy Governor Miranda rate of the Central Bank's decision to raise the BI Rate by 25 basis points to 6.75 percent is the first step to curb inflation.

"Inflation expectations are so real, if not done the first step, then inflation will be high,"said Miranda Gultom when met on the sidelines of a seminar at the Marine Building-Based Economic Dharmawangsa Hotel, Jakarta, Tuesday, January 8, 2011.

According to Miranda, raise the BI Rate is a decision that must be done to curb inflation. Miranda pointed out, in January 2010 and BI did not raise interest rates wheninflation expectations high. "Now, once seen there is a commitment, then the publicbelieves the economy again," he said.

According to Miranda, economic actors do not have to worry about the increase in the BI Rate. Therefore, the increase in the BI Rate is an important signal that the Central Bank to create a stable rate of the national economy.

Miranda said, a 12-year career in BI, raising interest rates is a decision that is verydifficult and unpleasant. But, as a public official's decision must be taken. "It was likeshortness of breath, but must be done," he said.