Looking ahead, as the Bank pursues QQE and the observed inflation rate rises, medium- to long-term inflation expectations are also likely to follow an increasing trend and gradually converge to around 2 percent – the price stability target. Accordingly, firms’ wage- and pricesetting behavior is expected to be more proactive, and inflation rates are likely to gradually rise accompanied by wage increases.
Given the role of Bank Indonesia as the systemic regulator, we continue to strengthen our expertise in monitoring systemic risk through developments in our macroprudential policy framework. The framework must provide clear, transparent and accountable objectives with a focus on maintaining financial system stability. 13.