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Kamis, Maret 28, 2024
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Indonesia C.Bank Holds Rates after Months of Hikes

“BI will be data dependant with some ammunition in the back pocket, should these risks materialise,” said Irman Faiz, economist at Bank Danamon, who sees BI having room to hike by 25-50 basis points more.

With inflation easing, growth slowing and concerns about the rupiah fading, BI is “unlikely to tighten policy any further this year”, Capital Economics analyst Shivaan Tandon said.

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The rupiah, despite some depreciation this month, has remained about 2.5% stronger than at the end of 2022.

Noting risks of further monetary tightening in the United States, Warjiyo stressed that BI would use other tools to maintain rupiah stability to ward off imported inflation, including BI’s plan to launch term deposit instruments for export proceeds.

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Starting on March 1, BI will begin to offer 1-, 3- and 6-month forex term deposits for clients of some banks with attractive returns, intended to coax exporters to keep their funds longer onshore.

BI nudged up its economic growth outlook for this year to the upper end of its 4.5% to 5.3% range, or about 5.1%, rather than at the midpoint, after data this month showed Southeast Asia’s largest economy expanded at the fastest pace in nine years at 5.3% in 2022.

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Warjiyo attributed the revision to China – Indonesia’s biggest trade partner – removing its zero-COVID policy, which could drive exports, as well as improving private consumption. (Ach/Ktn)

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