The issuance of central bank securities (LEBAC and NOBAC) has been the monetary authority’s natural absorption factor. These securities – with maturities that range from one month to two years – generated a monetary contraction of over 10 billion pesos in 2005.
Indonesia’s economy, in fact, has outperformed many other countries in the region and peer group. Economic activities have been sustained by relatively strong domestic demand, capable of absorbing domestic production and preventing the market from falling deeper off the precipice of recession. In the first quarter, the economy recorded 4.4% growth, which far exceeds international economic growth.