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MNI Bank Indonesia Preview - Dec 2023: On Hold, Watching The Fed

INDONESIA CENTRAL BANK
  • Bank Indonesia is widely expected to leave rates at 6% at its December 21 meeting. This would be the second consecutive hold since it hiked in October to aid its other FX stability tools. Inflation is within both the 2023 and 2024 bands of 3.0%±1% and 2.5%±1% respectively.
  • While the IDR has stabilised since the end of November, it likely has further to go for BI to be comfortable. Indeed, further appreciation is likely needed though for the central bank to feel that it can consider shifting to an easing bias and that will probably require the Fed to move in that direction first and not just signal it.
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