and monetary policies. such maintained consistency will grow trust in and credibility for the policies. second, amidst diverse and increasingly complex economic challenges as well as various vulnerabilities, including high current transaction deficit and inflation, a synergy of monetary and fiscal policies and structural reform are required to allow higher economic growth with maintained macro stability. third, timeliness is important in adopting policies. bank indonesia considers that policy mix should be implemented in a timely and measurable manner. ladies and gentlemen, 29. although external and internal challenges for the national economy ahead will become increasingly serious, it does not necessarily mean that the enthusiasm of our present economic achievement prospect will go dim. we think optimism over our economy ahead will remain high. 30. slide 19 : with such optimism, we estimate that indonesia ’ s economy will grow by 5. 4 % – 5. 8 % in 2015 and 5. 6 % – 6. 0 % in 2016, in a reduced deficit in the current transaction balance. with such prognosis, it is estimated that real exchange rate will relatively stable. to ensure that different structural reform programs supporting economic growth will be implemented, we are consistent in seeking to anchor inflation rate and its expectation on the medium term target at 4±1 %. 31. however, various positive prospects are not easily realized because there are some risks and challenges ahead. global economic condition ahead will remain full of uncertainty. divergent global monetary policies will make the world ’ s financial market vulnerable to shifting perception. global turbulence risks may spillover quickly to our economy through the financial market and trade. 32. meanwhile, we are still struggling with diverse structural rigidity and inefficiency, thereby making the supply side of our economy unresponsive. 33. considering the global and domestic economic constellations require consistent stability - oriented monetary policies and “ firm ” structural reform policies to increase the capacity and competitiveness on the supply side ; therefore, we expect our economy ahead will sustainably grow high from “ non - artificial ” forces. ladies and gentlemen, 34. i conclude my brief introduction. further description of the journey of indonesia ’ s economy in 2014 has been prepared in a 2014 indonesia economy report book ( lpi ), which you all will receive at the end of this event. 35. we invite all of you to thoroughly observe the contents of the book, which is the eminent regular publication of bank indonesia. as an illustration of the book cover, we have selected a figure of the “ gradon boat

stabilize rupiah exchange rate, and ( iv ) strengthen macro - prudential policy. 13. slide 11 : bank indonesia ’ s policy to increase bi rate in november 2014 is an “ ahead to curve ” step to mitigate expected inflation increase risks and ensure inflation pressure post - increase in subsidized fuel price will be controlled and temporary and may immediately return to the targeted track. 14. we believe that with inflation and its expectation anchored to low rate, people ’ s real savings and purchase power will not be eroded ; therefore, it becomes the foundation for stronger economic growth and poverty alleviation in the future. 15. the monetary policies we have adopted are accompanied by the strengthening of inflation control coordination through the inflation control team ( tpi ) and regional inflation control team ( tpid ). 16. the tight bias policy we have adopted also aims to ensure that the deficit in the current transaction balance, which has been taking place for three years, will remain controlled at 2. 5 – 3 percent of gdp and will not increase. controlled deficit in the current transaction balance is very vital to ensure the national economy will grow strong and balanced and job creation will continue. bis central bankers ’ speeches ladies and gentlemen, 17. we also see that efforts to maintain macroeconomic stability must also be supported by the principle of prudence in the business world. we observe that such prudence is primarily required for businesses obtaining foreign loans. 18. slide 12 : in this relation, bank indonesia has obliged corporations to do hedging by applying the following rules : ( i ) minimum hedging ratio, ( ii ) maintenance of forex liquidity adequacy, and ( iii ) minimum credit rating. we will consistently monitor the private foreign loans and take advanced steps if necessary. 19. slide 13 : in the financial sector, we also see that structural challenges must also be tackled to deepen financial market. alternative financing sources in our economy still focuses on the banking sector and remains undiversified, while the roles of bond market have been insignificant. 20. slide 14 : efforts to deepen financial market by developing “ hedging ” market have become very urgent as well because we will face increasingly complex global challenges. therefore, bank indonesia in cooperation with the financial services authority ( ojk ) has established a foreign exchange market committee, issued market conduct, simplified and deregulated some provisions to facilitate hedging transactions on the forex market, encouraged interbank repurchase activities