IDR: Chances of a 25bps cut from Bank Indonesia - TDS

Analysts at TDS expect Bank Indonesia to keep the benchmark 7-day reverse repo rate unchanged at 4.50%, but they concede that there is an almost equal chance of a 25bps cut.

Key Quotes

“The consensus is also in favour of a hold, but 7/27 respondents believe BI will ease. In fact economic growth remains sluggish and incapable of moving above the 5% Y/Y rate, while inflation is tame at 3.8% Y/Y (August) and declining recently vs a target of 4±1%. Finally, IDR has appreciated 0.7% since the last meeting on 22 August despite a surprise cut—a significant show of confidence from the market that could embolden BI to repeat itself today.”