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Bank Indonesia (BI) pauses rate cuts amid increased external uncertainty while opting to further loosen liquidity, per Standard Chartered Bank. USD/IDR is trading at 15,635.00.

Key quotes 

“BI kept the policy rate unchanged at 4.5% at its 14 April board meeting, against our and consensus expectations of a cut.”

“BI has cut its 2020 growth forecast to 2.3% from 4.1-4.6%, in line with the government’s forecast. We believe BI is prioritising its policy response, to support additional government budget financing.” 

“We maintain our call of 50bps of rate cuts for this year, bringing the 7-day reverse repo rate to 4% by year-end. We now see 25bps cuts in June and July.”