REPUBLIKA.CO.ID, JAKARTA -- Bank Indonesia (BI) assessed that the Federal Reserve's measure to reduce its monetary stimulus (tapering off) next month will stabilize IDR currency in the country. The tapering off will cut value of stimulus worth 10 billion USD, from 85 billion USD to 75 billion USD in 2014.
Deputy Governor of BI, Perry Warjiyo said that Indonesia's central bank received this decision despite a reduction value of monetary stimulus outside BI's expectation.
"More important thing is this decision showing the Fed's certainty in monetary policy," Warjiyo said on Thursday.
US Central Bank on Wednesday announced that they would begin to reduce its stimulus program massively in January 2014. It is because US economy and labor market showing improvements. This movement will have a positive impact on financial market stability, including IDR currency.
Reduction of monetary stimulus as US economy is in improvement process and recession. Warjiyo estimated that US economic recovery would improve national export, especially from manufacturing sector.
The Federal Open Market Committee (FOMC) said after a two day monetary policy meeting, the Fed reduced its stimulus program as an effort to decrease the long term interest rates to stimulate economic growth and jobs figure.
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