Indonesia: Further pause by the BI is on the cards – UOB

Economist at UOB Group Lee Sue Ann suggests the Bank Indonesia (BI) is likely to leave its policy rate unchanged at its meeting later in the week.

Key Takeaways

The key catalysts for the start of the rate-cutting cycle would be a consistently declining inflation and persistent stability of the rupiah, anchored by the new regulation of DHE and Indonesia’s economy optimism.

In the meantime, we continue to hold on to our forecast for headline inflation in 2023 at 3.8% y/y and we hold our view that the policy rate will remain at 5.75% for now.