USD/IDR: Rupiah holds near monthly lows on Bank Indonesia’s status-quo
|At its November monetary policy meeting on Thursday, Indonesia’s central bank, Bank Indonesia (BI), left its 7-day reverse repo rate unchanged at 5.00%, as widely expected. The central bank stood pat after four successive rate cuts since July.
The latest Reuters poll showed that 20 of 24 economists believed that Bank Indonesia (BI) will keep the key rate unchanged this week at 5.00%.
The central bank Governor Warjiyo noted that global growth has the potential to improve going forward despite the US-China trade war.
Additional Comments:
Domestic GDP resilient in Q3 although slowing in line with global econ slowdown.
GDP growth to improve in Q4 in accordance to seasonal pattern.
2019 economic growth seen at 5.1%.
2019 balance of payments seen on a surplus.
2019 current account deficit seen at 2.7% of GDP.
Rupiah to remain stable reflecting fundamentals.
YoY inflation at end-2019 seen at 3.1%.
Banking intermediary function being monitored.
Monetary policy remains accommodative.
RRR cut takes effect Jan 2, 2020.
RRR cut in order to support GDP growth by providing banks with liquidity.
Other instruments will be directed at lifting GDP growth.
To review domestic and global economy to utilize room for accommodative policy that will anchor inflation, support GDP growth.
On the no-rate decision by the Indonesian central bank, the Indonesian Rupiah (IDR) remains pressured against its American counterpart, keeping the USD/IDR near monthly tops of 14,117.5 levels. At the press time, the spot trades +0.17% at 14,114.
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