Bank Indonesia (BI) estimates that the policy direction of reducing liquidity injection or tapering off by the US Central Bank, The Federal Reserve, will be implemented in early 2022 at the earliest.

BI Governor Perry Warjiyo said that after reducing liquidity injection in early 2022, the US Central Bank would only start increasing the Fed Funds Rate (FFR) interest rate in the fourth quarter of 2022.

"The liquidity tapering policy will be preceded by clear signals and implemented in an orderly, methodical and transparent manner," he said in Jakarta, Monday (5/7).

For this year, the Fed will maintain its accommodative policy stance with low-interest rates in the range of 0 to 0.25% and bond purchases worth US$120 billion.

According to him, several factors make the Fed maintain an accommodative policy. First, the US inflation rate, which currently exceeds the 2% target, is still transitory and not permanent, so it is not due to structu