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MNI BI Preview – November 2021: No Change Until Next Year

EXECUTIVE SUMMARY

  • Indonesia's GDP growth slowed more than forecast in Q3, but higher-frequency indicators suggest that recovery is picking up pace.
  • Inflation environment remains relatively benign, with headline CPI persistently below the central bank's target range, which allows Bank Indonesia to keep monetary policy settings accommodative.
  • Policymakers are set to leave their key policy rate uchanged through the rest of this year. They are looking to gradually reduce liquidity over 2022, before considering a rate hike in the final quarter of next year.

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