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POLL Bank Indonesia Keeps Remaining Key Rates at 5.75%

By Anant Chandak

Bengaluru, June 20 (Reuters)Bank Indonesia (BI) will keep its key rate unchanged at 5.75% at its fifth meeting on Thursday and later in the year as inflation eased in May and is expected to fall further, according to a Reuters poll of economists. This is expected for the fifth consecutive day.

After hitting around 6% in September, inflation eased gradually to reach the upper end of the BI’s target range of 2-4%. last monthsuggests that the BI can wait and see even though policymakers in the US and Europe are likely to continue to tighten policy going forward.

All 34 economists polled by Reuters from June 14-19 expected the central bank to maintain its benchmark seven-day reverse repo rate. IDCBRR=ECI said at the end of the June 21-22 meeting.

Nearly two-thirds of respondents (15 of 23) said the key rate would remain unchanged at the end of 2023, and eight economists expected a rate cut later this year.

“Bank Indonesia was one of the first central banks in the region to pause its tightening cycle earlier this year,” said Nicholas Mapa, senior economist at ING. I believe we will implement a long moratorium on

Mapa added that BI “will only consider cutting the policy rate if global central banks choose to ease monetary policy.”

Like its peers in the region, BI was expected to keep rates unchanged for the rest of the year as a rate cut would lead to a weaker currency and higher import inflation.

Indonesian Rupiah IDR=is one of the best performing Asian currencies, gaining more than 4% against the dollar this year.

“The central bank’s next interest rate policy is likely to be a rate cut, but the timing of any easing reversal will depend on external conditions, and there are clear indications that the US Fed is entering a long hiatus, at least as a prerequisite. We are looking at it,” said Kuhn Goh, ANZ’s head of Asia research.

“Our baseline outlook is for the first BI rate cut to materialize in 2024. Strong consumer sentiment and liquidity conditions in the banking system also suggest that there is no urgency for a quick turnaround. suggests.”

The median forecast is for a 25 basis point cut to 5.50% in the first quarter of 2024, down slightly from the 50 basis point cut expected in the May survey.

(Reporting: Anant Chandak, Voting: Veronica Khongwir, Madhumita Gokhale, Editing: Hari Kishan, Ross Finley, Sharon Singleton)

((Anant.Chandak@thomsonreuters.com;))

The views and opinions expressed herein are those of the authors and do not necessarily reflect those of Nasdaq, Inc.

Summarize this content to 100 words
By Anant Chandak
Bengaluru, June 20 (Reuters) – Bank Indonesia (BI) will keep its key rate unchanged at 5.75% at its fifth meeting on Thursday and later in the year as inflation eased in May and is expected to fall further, according to a Reuters poll of economists. This is expected for the fifth consecutive day.
After hitting around 6% in September, inflation eased gradually to reach the upper end of the BI’s target range of 2-4%. last monthsuggests that the BI can wait and see even though policymakers in the US and Europe are likely to continue to tighten policy going forward.

All 34 economists polled by Reuters from June 14-19 expected the central bank to maintain its benchmark seven-day reverse repo rate. IDCBRR=ECI said at the end of the June 21-22 meeting.
Nearly two-thirds of respondents (15 of 23) said the key rate would remain unchanged at the end of 2023, and eight economists expected a rate cut later this year.
“Bank Indonesia was one of the first central banks in the region to pause its tightening cycle earlier this year,” said Nicholas Mapa, senior economist at ING. I believe we will implement a long moratorium on
Mapa added that BI “will only consider cutting the policy rate if global central banks choose to ease monetary policy.”
Like its peers in the region, BI was expected to keep rates unchanged for the rest of the year as a rate cut would lead to a weaker currency and higher import inflation.

Indonesian Rupiah IDR=is one of the best performing Asian currencies, gaining more than 4% against the dollar this year.
“The central bank’s next interest rate policy is likely to be a rate cut, but the timing of any easing reversal will depend on external conditions, and there are clear indications that the US Fed is entering a long hiatus, at least as a prerequisite. We are looking at it,” said Kuhn Goh, ANZ’s head of Asia research.
“Our baseline outlook is for the first BI rate cut to materialize in 2024. Strong consumer sentiment and liquidity conditions in the banking system also suggest that there is no urgency for a quick turnaround. suggests.”
The median forecast is for a 25 basis point cut to 5.50% in the first quarter of 2024, down slightly from the 50 basis point cut expected in the May survey.

(Reporting: Anant Chandak, Voting: Veronica Khongwir, Madhumita Gokhale, Editing: Hari Kishan, Ross Finley, Sharon Singleton)

((Anant.Chandak@thomsonreuters.com;))

The views and opinions expressed herein are those of the authors and do not necessarily reflect those of Nasdaq, Inc.

https://www.nasdaq.com/articles/poll-bank-indonesia-to-hold-key-rate-at-5.75-for-rest-of-year POLL Bank Indonesia Keeps Remaining Key Rates at 5.75%

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