In accordance with the mandate given by the Law, Bank Indonesia can only contribute to the nation through its efforts in maintaining macroeconomic and financial system stability. Still, the achievement of such a mandate will largely depend on coordination with other authorities, cooperation with various parties, and the help and support of various stakeholders.
2  BIS central bankers’ speeches  Empirical work from advanced countries suggests that, “successful maintenance of price stability requires keeping long-run inflation expectations at the desired level, as economic shocks and policy mistakes come and go”.5 Underscoring the importance of inflation expectations, the Reserve Bank’s Second Quarter Review of Monetary Policy 2012–13 released on 30th October 2012 noted: “A central premise of monetary policy is that low and stable inflation and well-anchored inflation expectations contribute to a conducive investment climate and consumer confidence, which is key to sustained growth on a higher trajectory in the medium-term.” Measurement of expectations While it is challenging to conceptualise inflation expectations, it is even more difficult to measure it as it cannot be observed in real time.