Bank Indonesia is turning to machines to help make its policy more effective.
In a nation of 260 million people spread across more than 17,000 islands, gathering the right kind of information at the right time presents a unique challenge to the central bank.
Explosive growth in Internet use and social media among Indonesia’s young and growing population has opened up new data sources that policymakers are using to plug gaps in the official numbers.
Take jobs data for example. Indonesia’s statistics agency publishes employment data every six months, so the central bank is supplementing that with information extracted from online jobs portals, Bank Indonesia statistics department head Yati Kurniati said.
In the absence of official figures, the bank is also collecting data on the secondary property market from online housing sources to give it a better sense of the health of the economy.
“Every central bank is talking about the digital economy: how we measure it and how it will have an impact on our policy,” Kurniati, who took on her new role in March, said in an interview at her office in Jakarta.
“The machines can screen very large amounts of information,” she said, although “we still have to use our own eyes to make sure the context is appropriate.”
The department’s work is feeding straight into policy decisions, she said, adding that for 15 days before an interest rate announcement, the unit scours social media, news sites and other content on the Internet to monitor public perception and rate expectations, and transmit that to bank Governor Agus Martowardojo and his board.
The response from policymakers has been “very positive,” Kurniati said.
After eight rate reductions since the beginning of last year, all 23 economists surveyed by Bloomberg predict that the bank will keep its benchmark interest rate unchanged at 4.25 percent today, even though Indonesian President Joko Widodo still thinks there is room to cut.
Martowardojo last week said that future rate decisions will depend on the economic data.
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