March 19, 2024 02:13 GMT
MNI Bank Indonesia Preview – March 2024: IDR Needs Fed To Ease First
Bank Indonesia (BI) is unanimously expected to leave rates at 6.0% at its March 20 meeting given the persistence of a high level of “global uncertainty” and little new domestic information since the last decision.
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EXECUTIVE SUMMARY:
- Bank Indonesia (BI) is unanimously expected to leave rates at 6.0% at its March 20 meeting given the persistence of a high level of “global uncertainty” and little new domestic information since the last decision. FX stability remains its focus and as USDIDR remains elevated, a pivot to a dovish tone is highly unlikely this month. BI will not want to risk further rupiah softening by cutting rates ahead of the Fed.
- BI has said that it sees H2 2024 as the window to begin easing to support growth but if the first Fed move is delayed, then it may not be able to cut until closer to the end of the year rather than the middle.
- Indonesian CPI inflation is well within the target band and growth is robust, although exports are looking soft but BI expects them to improve. It is likely to continue to support the economy with accommodative macroprudential measures for now.
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