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MNI BI Preview – October 2021: Still Pressing Pause

EXECUTIVE SUMMARY

  • Indonesia's CPI inflation remains below the lower bound of the central bank's target range, while the rupiah has appreciated since the previous monetary policy meeting.
  • However, policymakers will likely leave the 7-Day Reverse Repo Rate unchanged at 3.50% as domestic economy is showing signs of recovery, while Fed taper looms large.
  • Governor Warjiyo recently suggested that the central bank are planning to drain liquidity over the next year and consider a rate hike by end-2022, which implies that the next move in benchmark policy rate will be up.

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