0346 GMT - Bank Indonesia's moderate rate hike isn't a cure-all for the rupiah's woes, but should serve to backstop the currency, DBS senior economist Radhika Rao says. The hike looks prudent and pre-emptive, as global cues and domestic catalysts are less than conducive for IDR. Considering BI's revised assumption for one Fed rate cut in 2024 from two earlier, its vigilant stance and IDR priority, DBS thinks the Indonesian central bank will stay on an extended pause in 2024. It assigns a 30% probability of a follow-up hike if conditions merit it, noting that further USD strength is still on the table. BI's future policy response might include "sterilized intervention," bond purchases and calling on state-owned firms to restrain sizeable USD purchases. (fabiana.negrinochoa@wsj.com)
(END) Dow Jones Newswires
April 24, 2024 23:46 ET (03:46 GMT)
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