Indonesia: Mounting IDR pressure – Standard Chartered

Analysts at Standard Chartered Bank lower Indonesian 2020 GDP growth forecast further to 4.1% (from an already downgraded 4.8%). USD/IDR is trading at 16592.50.

Key quotes

“We downgrade our 2020 growth forecast further to 4.1% from 4.8% on global recession risk.”

“We maintain our 2020 average inflation forecast of 3.1% on likely subdued domestic demand and stable administered price inflation.”

“Bank Indonesia (BI) has lowered its 2020 growth forecast to 4.2-4.6% from 5.0-5.4%; we now expect it to cut rates by 25bps each in June and July.”

“We see a risk of earlier and larger interest rate cuts if growth deteriorates faster than expected and depreciation pressure on the IDR eases.”