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Bank Indonesia: Rate pause, but RRR cut – ANZ

Analysts at Australia and New Zealand Banking Group (ANZ) offer  their quick reaction to the Indonesian monetary policy decision announced earlier this Thursday.

Key Quotes:

“Bank Indonesia (BI) left its 7-day reverse repo rate at 5.00% today, after delivering a cut of 25bps each in its previous four meetings.

However, it lowered banks’ reserve requirement ratio (RRR) by 50bps in a move aimed at boosting liquidity and supporting growth.

While BI has signalled scope for further policy easing, today’s actions suggest the central bank is keen to use its policy space more cautiously now.

We maintain our view that the current easing cycle is nearing its end and continue to see just one more 25bp rate cut.”

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