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INDONESIA: CPI Opens Door to Rate Cut for Central Bank

INDONESIA
GlobalEM BulletAPACBulletIndonesiaEmerging Market NewsRegion
  • Today’s CPI release came in lower than expected, opening the door for a cut in interest rates by the Bank Indonesia at its next meeting on October 16.
  • Bank Indonesia has a target range of 2-4%
  • Today’s print of 1.84% is the first time since 2021 that the CPI has dipped below 2.00%.
  • Back in 2021, the bottom in CPI print had been preceded by a rate cutting cycle that had begun in 2019.
  • Today’s cycle sees interest rates much higher at 6.00% and Central Bank forecasts of GDP growth to be 5.00%.
  • Given the Central Bank's forecast for inflation is at 2.70%, today’s CPI print makes October 16 ‘live’ in expectations for a rate cut. 
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  • Today’s CPI release came in lower than expected, opening the door for a cut in interest rates by the Bank Indonesia at its next meeting on October 16.
  • Bank Indonesia has a target range of 2-4%
  • Today’s print of 1.84% is the first time since 2021 that the CPI has dipped below 2.00%.
  • Back in 2021, the bottom in CPI print had been preceded by a rate cutting cycle that had begun in 2019.
  • Today’s cycle sees interest rates much higher at 6.00% and Central Bank forecasts of GDP growth to be 5.00%.
  • Given the Central Bank's forecast for inflation is at 2.70%, today’s CPI print makes October 16 ‘live’ in expectations for a rate cut.