USD/IDR: Rupiah little changed on Bank Indonesia’s unexpected rate cut
At its August monetary policy meeting on Thursday, Indonesia’s central bank, Bank Indonesia (BI), unexpectedly cut its 7-day reverse repo rate by 25bps to 5.50%.
The latest Reuters poll showed that 17 of 19 economists said they expect Bank Indonesia (BI) to stand pat and keep its 7-day reverse repurchase rate at 5.75%.
The central bank Governor noted that global economic dynamics must be taken into account in our efforts to support GDP growth.
Additional Comments:
Policy mix by central bank and govt needed to lift GDP growth.
GDP growth to remain good supported by consumption, investment.
Keeps 2019 economic growth outlook at below midpoint of 5.0-5.4%.
2020 growth seen at midpoint of 5.1%-5.5%.
2019 and 2020 current account deficit seen within 2.5%-3% of GDP.
To continue making sure money market has enough liquidity.
Room for accommodative macroprudential policy open.
Loan growth in 2020 seen at 11%-13% y/y, up from 2019's 10%-12% outlook.
On the rate cut by the Indonesian central bank, the Indonesian Rupiah (IDR) remains modestly flat against its American counterpart, keeping the USD/IDR recovery intact near 14,240 levels. The spot reached three-day lows of 14,225 before the rate decision.
USD/IDR Technical Levels
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
