Analysts at TD Securities suggest that following 100bp of policy hikes since mid-May, they expect Bank Indonesia to stand pat at this meeting, leaving the 7 day reverse repo rate at 5.25%.
Key Quotes
“In particular, IDR stability since the 29 June meeting will reduce the incentive to hike again. BI is now likely to wait to ascertain the impact of previous hikes. Inflation remains well contained, just below the mid point of BI’s target range, suggesting no urgency to hike again so soon. That said, we still see risks of another hike by BI in Q3, especially if IDR pressures re-emerge.”
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