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22 May 2015
Rates steady, albeit further easing in Indonesia – BBH
FXStreet (Edinburgh) - Analysts at BBH noted the Bank of Indonesia refrained from cutting rates at its meeting, although it further eased its policy via other instruments.
Key Quotes
“Bank Indonesia kept rates steady at 7.5%, as expected, but eased via macroprudential policies”.
“For example, it increased the loan-to-value limits to boost lending”.
“Note that Q1 GDP came in weaker than expected at 4.7% y/y, and was the weakest since Q3 2009”.
“We think Bank Indonesia retains an easing bias and so there will likely be more easing measures ahead and a policy rate cut remains an option”.
“BI will have to be cautious in light of recent IDR softness and rising inflation, as a surprise rate cut would feed further into those negative impulses”.
Key Quotes
“Bank Indonesia kept rates steady at 7.5%, as expected, but eased via macroprudential policies”.
“For example, it increased the loan-to-value limits to boost lending”.
“Note that Q1 GDP came in weaker than expected at 4.7% y/y, and was the weakest since Q3 2009”.
“We think Bank Indonesia retains an easing bias and so there will likely be more easing measures ahead and a policy rate cut remains an option”.
“BI will have to be cautious in light of recent IDR softness and rising inflation, as a surprise rate cut would feed further into those negative impulses”.