Free Trial

Heading South




Breaches Key Short-Term Support


Late SOFR/Treasury Option Trade

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access
MNI (Sydney)

Pressure is mounting on Indonesia’s central bank to raise interest rates for the first time since September 2020 as inflation gains momentum and a weakening currency reduces the attractiveness of local assets for foreign investors.

Bank Indonesia’s Board of Governors goes into what is expected to a “live” meeting this week, and while the expectation is a steady reverse repo rate at 3.5% monetary tightening is considered to not be far away, (See: MNI INSIGHT: Indonesia CenBank Sees A Window To Drive Recovery).

The rupiah has been on a slide this year as the USD has surged, and could soon test the 15,000 level against the USD and neighbouring Malaysia has already acted to shore up the ringgit, (See: MNI INSIGHT: Stable Ringgit Key As Malaysia CenBank Tightens).


Inflation hit a five-year high of 4.35% in June, up from 3.55% in May and above BI’s 2% to 4% target. This is the first time in five years inflation has been above the target.

Arguing against a rate hike is that core inflation, BI’s preferred measure, is at 2.6% and inside the target range.

The Indonesian economy has benefitted from high commodity prices and government subsidies have kept a lid on prices as growth has rebounded. But earlier forecasts for growth this year are now seen as too ambitious. BI’s growth forecast is 4.5% to 5.3%.

BI’s Board of Governors begin their two day meeting on Wednesday, with the decision due on Thursday afternoon in the Asian time zone.

MNI Sydney Bureau | +61-405-322-399 |
MNI Sydney Bureau | +61-405-322-399 |

To read the full story

Why Subscribe to

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.