Indonesia: BI cut to have limited impact on IDR – TDS

FXStreet Team FXStreet

Rally in IDR, further drops in inflation, to fuel another cut by the Bank of Indonesia (BI). USD/IDR is trading at 14,885.

Key quotes

“After surprisingly keeping policy on hold in April, we expect Bank Indonesia to cut its 7d reverse repo rate by 25bp top 4.25% at its meeting on Tue 19 May.”

“Consensus is mixed, with half of analysts polled (Bloomberg) looking for no change, implying that it is a close call. We see little reason for BI not to ease.”

“We see limited upside for IDR from current levels, with risks of renewed weakness amid any intensification of risk aversion. A likely 25bp rate cut at this meeting will have limited impact on IDR.”

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FXStreet Team

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