Indonesia's central bank governor says he sees 'bumpy road ahead'

MAY 20, 20154:09 PM

[JAKARTA] Indonesia's central bank must strike the right balance between the needs for stronger growth and stability in Southeast Asia's largest economy, Governor Agus Martowardojo said on Wednesday. "We are still headed for a bumpy road ahead," he said, adding that Bank Indonesia would improve its coordination with the government.

There's a "need to strike the right balance between stronger growth and stability," Mr Martowardojo told reporters.

The governor's comments came a day after a Bank Indonesia policy meeting at which it kept the benchmark interest rate unchanged at 7.5 per cent.

The central bank has come under some political pressure for a cut to help lift economic growth, which has slumped to its slowest pace since 2009.

But BI remains concerned about the country's inflation rate and its current account deficit.

Mr Martowardojo said Wednesday he sees the inflation rate in the current and third quarter being around 7 per cent, before easing to 4.2 per cent at the end of 2015.

REUTERS