REPUBLIKA.CO.ID, JAKARTA - Bank Indonesia (BI) has signaled to tighten its monetary policy after inflation in January 2014 showed relatively higher than its historical level at 1.07 percent, despite trade surplus in December 2013. 

"Compared to the earlier year, we did not see better improvement during 2013. Hence, BI will its policy stance tight during the bias condition," BI governor, Agus Martowardojo said on Thursday.

Financial market is still experiencing turmoil after economic recovery in some developed countries driving their money flows out of the developing countries, including Indonesia. Martiwadoyo warned Indonesia to remain cautious on such moves, despite Indonesian economic showed some improvement. 

Martowardojo said that he was optimistic that current account deficit in 2013 might be lower than 3.3 percent totally. BI will keep inflation expectation to reduce deficit. 

"BI will remain cautious and by analyzing data, we will not hesitate to make some adjustment on policy rate if necessary," he said.

Meanwhile, Coordinating Minister for Economic Affairs, Hatta Rajasa said that government would keep its coordination with BI to maintain inflation rate at 4.5 percent plus minus 1 percent. He has led a coordination meeting of food and inflation in Jakarta on Thursday. He claimed that food supply was sufficient in terms of production, supply and price. 

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