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Let taka slide

Indos

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'Hindu rate of Growth' you mean? Hindu rate of growth is a very good model as it has lowest risk, lower return growth. Indonesia follows similar model.

??????

WE DONT FOLLOW YOUR ECONOMIC SYSTEM ( HIGH STATE BUDGET DEFICIT TO PUSH THE ECONOMY )

INDIA ( INEQUALITY )

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INDONESIA (INEQUALITY)

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Indos

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Rates are hiked to curb demand side inflation, not supply side. India is facing double sided inflation. I think Indonesia is facing demand plateauing as they withdrawn Palm oil Export ban within weeks as there is no demand in local market and farmers were making losses.

LOL every body knows interest rate increase is for curbing demand side in term of classic strategy to deal with demand side inflation ( money supply excess as well ), but the main problem of current inflation is more on supply side. This is why India is reluctant to increase interest rate despite inflation in India has been around 6 % since 2021.

The reason the interest rate is increased for India case is to strengthen the currency, not letting what happen in Turkey to happen in India. Strengthening the currency is also important to curb the effect of energy and commodities import increase that used USD in the transaction
 
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bluesky

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We also have the "indian growth" joke .
Another la la excuse for the Taka sliding. BD produces almost no industrial goods So, it exports garments and imports all of them

This year the import volume will exceed 80 billion dollars that will reduce the FC reserves. You do not have to compare with other countries to feel good.

I wish BD to build mills and factories that will reduce imports in the long run. Otherwise, it is another SL or Pakistan.
 

pikkuboss

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LOL every body knows interest rate increase is for curbing demand side in term of classic strategy to deal with demand side inflation ( money supply excess as well ), but the main problem of current inflation is more on supply side. This is why India is reluctant to increase interest rate despite inflation in India has been around 6 % since 2021.

The reason the interest rate is increased for India case is to strengthen the currency, not letting what happen in Turkey to happen in India. Strengthening the currency is also important to curb the effect of energy and commodities import increase that used USD in the transaction
A 50 basis point change doesn't indicate anything. It's normal to interest rate by 50 points. Tell me when there is a 200-500 points difference. India has higher inflation because it is facing both Demand and supply side inflation unlike Indonesia which is only facing supply side inflation with plateauing demand. As for currency, India doesn't manipulate its Currency much, India has a huge load of Forex reserve to take care of the currency fluctuation. The recent currency devaluation is linked to major pull out by FII due to US rate hike, this is a global phenomena.

The only possible reason for India's rate hike is to curb demand, not currency.
 

Destranator

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Another la la excuse for the Taka sliding. BD produces almost no industrial goods So, it exports garments and imports all of them

This year the import volume will exceed 80 billion dollars that will reduce the FC reserves. You do not have to compare with other countries to feel good.

I wish BD to build mills and factories that will reduce imports in the long run. Otherwise, it is another SL or Pakistan.
@-blitzkrieg- is Pakistani.
 

Indos

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A 50 basis point change doesn't indicate anything. It's normal to interest rate by 50 points. Tell me when there is a 200-500 points difference. India has higher inflation because it is facing both Demand and supply side inflation unlike Indonesia which is only facing supply side inflation with plateauing demand. As for currency, India doesn't manipulate its Currency much, India has a huge load of Forex reserve to take care of the currency fluctuation. The recent currency devaluation is linked to major pull out by FII due to US rate hike, this is a global phenomena.

The only possible reason for India's rate hike is to curb demand, not currency.

Once again, every body knows that US Federal Reserve (The Fed) policy to stop quantitative easing and start tightening their monetary policy is one of the main reason of many developing country currencies depreciation. This is why many country central bank needs to increase interest rate to make them competitive enough compared to USD in which I think it is one of the main reasons of why India Central Bank wants to increase interest rate.

My assumption is due to the fact that India in essence is more hype in getting more growth than curbing the inflation, it can be seen in historic data where India inflation is relatively high compared to other nations.

50 basis point change does indicate the Central Bank is ready to increase rate if necessary, it is the signal given to the financial market since for quite long India doesnt increase the rate, India as far as I know lower interest rate since 2020 as World Economy is struck with Pandemi as one of the stimulus measure to help cushion the economic crisis during that time.

Many of movement in currency is also derived from sentiment in the financial market and future expectation of Central Bank policy. This is the other reason, for example, of why Turkish Lira was so rapidly falling in previous months ( Erdogan lower interest rate policy to tackle inflation is against market system logic which make financial institutions lost confident in Turkish Lira )

Indonesia Central Bank until now hasnt increase the interest rate

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PS : Devaluation is the policy to devalue our own currency, you should say depreciation instead to tell about the lost value of your currency due to market mechanism.

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What make inflation in Indonesia is not high ?

LOL what plateauing demand ? In 2020 Indonesia GDP growth is not as worse as in India with nearly minus 7 percent growth, the rebound happened in India economy Q1, Q2, and Q3 is more due to the low base of growth happened in 2020 due to lock down measure imposed by India gov. ( Fiscal year/Jan-Desember)

Indonesia retail sales, domestic consumption does increase in 2021, this is why we can post 3.7 percent growth and in Q 4 the growth is 5 percent.

In 2022, as the the economy is getting opened and mobility is increasing, the domestic consumption is also getting higher. Now tell me what is the figure of India domestic consumption in Q4 2021 ( Oct-Desember) ? Since India can only post 5.4 % growth in that period, not much different with Indonesian growth at around 5 %. Better use real growth rather than projected one.

In Q1 2022, Indonesia can post another 5 percent growth where the inflation in Q 1 is still about 2.4 percent. The growth is more driven by Domestic consumption, government spending, and Investment growth ( around 30 %) . While in term of export and import, despite having trade surplus of 9.3 billion USD in Q1, the figure is actually too small to significantly push the GDP Q1 figure.

Gov subsidy and food production (supply side intervention)

The reason of why Indonesia inflation is small is not due to plateu demand as you think, but it is due to subsidy given by government for gasoline retail sales, and also because we are big producers of coal where domestic price is capped much lower than international price ( market price ), so it makes our power plant that provide electricity to industry and house hold can give much cheaper rate compared to other nations in general. Due to that fact, Indonesian industry can still produce goods and services to domestic market without much pressure from the electricity cost ( supply side ). India actually has huge coal production as well with much lower domestic price, only 20 % of coal domestic consumption in India is sourced from import.

Indonesia is also a big agricultural country where we can self sufficient with our main food like rice ( supply side ).

So because the inflation comes from supply side, Indonesian economic policy is to fix the supply side with several measures like subsidy, state owned enterprises muscle, and other government intervention in the supply side of the economy.
 
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Indos

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LOL every body knows interest rate increase is for curbing demand side in term of classic strategy to deal with demand side inflation ( money supply excess as well ), but the main problem of current inflation is more on supply side. This is why India is reluctant to increase interest rate despite inflation in India has been around 6 % since 2021.

The reason the interest rate is increased for India case is to strengthen the currency, not letting what happen in Turkey to happen in India. Strengthening the currency is also important to curb the effect of energy and commodities import increase that used USD in the transaction

Strict monetary policies unable to address inflation: Minister​

2 hours ago

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Screenshot of Finance Minister Sri Mulyani during a meeting with Commission XI in the House of Representatives Building, Jakarta, on Wednesday, June 8, 2022. (ANTARA PHOTOS/Sanya Dinda/my)


Jakarta (ANTARA) - Finance Minister Sri Mulyani Indrawati believes that overly rapid and strict monetary policies did not have a significant impact in reducing the inflation rate.

This was owing to the fact that the spike in inflation rate in several countries was caused by production or supply not being able to meet the increasing demand, and stricter policies would only address the demand aspect, she explained.

"If macro policies, namely fiscal and monetary policies, are (growing way too) rapidly or too strictly, (it will) affect the demand (aspect) more, (while) not actually addressing the supply problem," Indrawati remarked at a meeting with Commission XI at the House of Representatives Building here on Wednesday.

The minister stated that the supply of leading commodities, such as crude oil, gas, coal, wheat, and corn, was held back due to the Russia-Ukraine war and the COVID-19 pandemic.

"Hence, the current world inflation, contributed by the production or supply (aspect), is more dominant than the contribution from the demand (aspect) either due to the war or pandemic," Indrawati remarked.


Related news: BPS records inflation of 0.4 percent in May 2022
She pointed out that the inflation would always be chiefly discussed during international forums, including in the G20, until the following year.

The topic was also discussed at the Islamic Development Bank (IsDB) meeting that involved a discussion on how swiftly and stringently the monetary policies need to be applied by central banks to address inflation.

According to the minister, should the policies be too rapid or too strict, the global economy would grow weak.

Indrawati noted that at the IsDB meeting, she had spoken to several other finance ministers about inflation.

Turkish Finance Minister Nureddin Nubeti stated that the annual inflation rate in his country had hit 74 percent, as energy sources, such as fuel and gas, were not subsidized by the state.

Moreover, the finance minister of Egypt drew attention to the impact of rising wheat and oil prices due to which he decided to provide subsidies in energy to its citizens. As a result, Egypt experienced the worse budget deficit than Indonesia.

"What is ongoing is that indeed, the world's economic recovery is in progress, yet it is happening concurrently with the increase in commodity prices, which have skyrocketed, especially since February when the attack on Ukraine by Russia took place," she added.

 

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