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MNI BI Preview-March 2025: Weaker IDR Likely To Drive Hold

Bank Indonesia (BI) meets on Wednesday and is expected to keep rates steady at 5.75% given the continued IDR weakness.
Asia Bank - PreviewBank of Indonesia - PreviewAPACAnalysisEM Central Bank ReportsEM Central Bank PreviewIndonesiaStory

Downloand Full Report Here

EXECUTIVE SUMMARY:

  • Bank Indonesia (BI) meets on Wednesday and is expected to keep rates steady at 5.75% given the continued weakness in the rupiah but it is a close call with BI wanting to support growth especially considering the negative impact of heightened uncertainty on global growth from US trade policy. 10 out of 36 respondents on Bloomberg are forecasting a 25bp rate cut. 
  • Rupiah weakness, especially its underperformance relative to other Asian currencies and response to equity volatility, is likely to worry BI, especially given the increase in portfolio outflows which drove a drop in FX reserves.
  • BI has a number of policy tools. It has used macroprudential measures to support growth and lending for some time and has money market deepening instruments and intervenes in the market to manage the currency. 

 

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Downloand Full Report Here

EXECUTIVE SUMMARY:

  • Bank Indonesia (BI) meets on Wednesday and is expected to keep rates steady at 5.75% given the continued weakness in the rupiah but it is a close call with BI wanting to support growth especially considering the negative impact of heightened uncertainty on global growth from US trade policy. 10 out of 36 respondents on Bloomberg are forecasting a 25bp rate cut. 
  • Rupiah weakness, especially its underperformance relative to other Asian currencies and response to equity volatility, is likely to worry BI, especially given the increase in portfolio outflows which drove a drop in FX reserves.
  • BI has a number of policy tools. It has used macroprudential measures to support growth and lending for some time and has money market deepening instruments and intervenes in the market to manage the currency.