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MNI STATE OF PLAY: Weaker Rupiah Weighs On Indonesia's CenBank

MNI (Sydney)
SYDNEY (MNI)

Indonesia's central bank is closer to raising interest rates.

Indonesia’s central bank meets this week with a weakening currency increasing the pressure to raise interest rates, which have been unchanged since September 2020.

Bank Indonesia’s board of governors goes into a two-day meeting on Wednesday and while it is expected that it will keep the key reverse repo rate unchanged at 3.5%, the bank could also spring a hawkish surprise and seek to pro-actively address the emerging challenges of the weaker currency, which is undermining the attractiveness of Indonesian bonds for foreign investors.

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Indonesia’s central bank meets this week with a weakening currency increasing the pressure to raise interest rates, which have been unchanged since September 2020.

Bank Indonesia’s board of governors goes into a two-day meeting on Wednesday and while it is expected that it will keep the key reverse repo rate unchanged at 3.5%, the bank could also spring a hawkish surprise and seek to pro-actively address the emerging challenges of the weaker currency, which is undermining the attractiveness of Indonesian bonds for foreign investors.

Keep reading...Show less