In February 2011 Bank Indonesia increased BI Rate by 25 bps to 6.75% as a response to intensifying inflation expectation, which is attributable to high volatile food inflation. Since September 2011, the monetary stance is turned to an easing phase, by decreasing the lower limit of interbank money market interest rate corridor.
Ladies and gentlemen, several papers that link monetary policy actions and the exchange rate policy have been lined up for presentation today. These include research that looks into factors that explain exchange rate movements, the extent of real exchange rate misalignment and the relationship between the real exchange rate and exports.