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MNI BI Preview - June 2023: On Hold, Easing Talk Not Yet

  • Bank Indonesia (BI) has been on hold at 5.75% since February and are unanimously expected to stay there at the June 22 meeting. The discussion is now around when it is likely to begin easing given that inflation has returned to the target band sooner than expected.
  • It is unlikely that BI will begin to signal a pivot at the June meeting due to some IDR weakening and clear indications from the Fed this month that it was not yet done. Watch the meeting press release for any further changes in tone.
  • A marked deterioration in growth, a stable Fed, further fall in inflation with the IDR holding below its March peak of 15400 are likely needed to drive the onset of an easing bias.
  • See full preview here.

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