Pundits divided on Bank Indonesia’s next move as rupiah hovers at multi-year low
While the country had expected to see interest rates ease this year, that is no longer an option given the central bank’s need to cushion a falling currency
[JAKARTA] A plunging rupiah has placed Indonesia’s central bank in a challenging position as the next monetary policy meeting looms, with pundits divided on their expectations for the outcome at Wednesday’s (Apr 24) session.
In a climate where most central banks are expected to slash interest rates to shore up their economies as inflation has softened, Bank Indonesia’s (BI) next moves have become hard to gauge, given that the rupiah has lost more than 5 per cent of its value against the US dollar year to date.
While a majority of analysts expect BI to keep its policy rate steady at 6 per cent for now given its focus on rupiah stability and inflation management, a small group is expecting the central bank to buck the trend and hike rates.
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