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MNI Bank Indonesia Preview - December 2022: BI To Slow To 25bp Hike

EXECUTIVE SUMMARY

  • Bank Indonesia is likely to hike rates a smaller 25bp in December bringing the total this cycle to 200bp and one of the highest rates in the region. This is widely expected by economists but the risk is to the upside with some still expecting a 50bp move.
  • The stabilisation of USDIDR and further moderation in headline inflation allows the central bank to pivot but another hike is still needed as core inflation is yet to turn down, headline remains above target and the effective exchange rate is lower.
  • Another 25bp hike is likely at the January meeting to bring inflation back to the target band and to ensure FX stabilisation.

For the full piece, see here.

BI Preview - December 2022.pdf

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