ANZ analysts note that the Bank Indonesia (BI) has kept its 7-day reverse repo rate at 6.00% today.
Key Quotes
“Neither was there much in the policy statement and press conference that suggested an urgency to act at the next meeting. However, we are of the view that conditions for BI to partially unwind its 2018 rate hikes are coming together, given the stability in the rupiah, a fall in currency volatility, prolonged US Fed hold, improving trade balance and benign domestic inflation.”
“We therefore continue to expect BI’s reverse repo rate to fall to 5.50% by end-2019 from 6.00% currently, but see risks that the moves will come in later than our expectations of May and August this year.”
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