BI left rates unchanged in January – UOB
|Enrico Tanuwidjaja, Economist at UOB Group, assessed the recent decision by the Bank Indonesia (BI) to leave the interest rates unchanged at its January meeting.
Key Quotes
“At the January 2020 monetary policy meeting (MPC), Bank Indonesia (BI) decided to keep its7- day Reverse Repo Rate unchanged at 5.00%., It also maintained the Deposit Facility rate at 4.25%and the Lending Facility rate at 5.75%. BI reiterated that the monetary policy will remain accommodative; consistent with low inflation expectations, maintained external stability, and efforts to support the domestic economic growth.”
“BI forecasts that the full year 2019’s GDP growth is likely to be around 5.1% before accelerating towards the 5.1%-5.5% range for 2020; underpinned by exports recovery (commodity price picked up and higher demand from Indonesia’s trading partner), strong household consumption, and faster investment (driven by infrastructure and the return of business confidence). Going forward, BI will pay a close attention to both global and domestic economy development in utilizing an accommodative policy mix.”
“However, we continue to look for a 25bps cut by BI to 4.75% in Q1 2020; on top of alternative monetary policy via macroprudential and liquidity-supporting measures to effectively transmit the lowering of the benchmark interest rate into the economy.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.