Fiscal expansion raises concerns for BI’s independence
Central bank says it will align policy to reduce cost of government spending programmes
Economists have flagged concerns about central bank independence in Indonesia following the appointment this week of a new finance minister who is expected to pursue fiscal expansion.
The concerns relate to a plan by Bank Indonesia (BI) to support government spending programmes by purchasing Indonesian government bonds on the secondary market. The central bank said on September 8 that the plan aimed to reduce the cost of government projects involving the construction of public housing and
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