Bank Indonesia Could Deliver a Rate Increase in 4Q
Dow Jones08-20 15:26
0726 GMT - Bank Indonesia could raise its policy rate by 25 bps in 4Q, if external and inflation risks renew pressure on the rupiah, CIMB economists say in a note. A narrowing current-account deficit could support the rupiah in 2H, but external factors, including the Fed rate path, dollar strength and oil prices, are likely to remain key currency drivers, they say. Domestic inflation risks are skewed to the upside amid potential El Nino-related food disruptions and Middle East-driven energy price volatility, they reckon. With growth expected to weaken in 2H, CIMB expects BI to remain patient while monitoring global rates and rupiah dynamics.
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