Bank In­done­sia likely to hold key rate

The Sun (Malaysia) - - SUNBIZ -

JAKARTA: In­done­sia’s cen­tral bank, which has cut rates ag­gres­sively this year, is ex­pected to hold its bench­mark steady to­day as it as­sesses the im­pact of ear­lier pol­icy eas­ing on the slug­gish econ­omy.

Bank In­done­sia (BI) has cut its key rate five times in 2016, by a to­tal of 125 ba­sis points, and trimmed banks’ re­serve re­quire­ment ra­tio to aid eco­nomic growth, which last year was 4.8%, the slow­est since 2009.

The cen­tral bank has switched its main pol­icy rate from the 12-month ref­er­ence rate to the 7-day re­verse re­pur­chase rate , to more di­rectly im­pact the fi­nan­cial market and en­hance the ef­fects of its mone­tary eas­ing.

Thir­teen of 17 econ­o­mists sur­veyed by Reuters said BI will leave its bench­mark to­day. The other four forecast another 25 ba­sis point cut.

“We think that BI will wait to see how ef­fec­tive these mea­sures are in boost­ing growth be­fore cut­ting again,” Cap­i­tal Eco­nom­ics said in note.

The con­sul­tancy noted that BI might ease mone­tary pol­icy again later, but the tim­ing “will de­pend on when and how ag­gres­sively the US Fed moves to tighten in­ter­est rates”. – Reuters

Peo­ple on elec­tric bikes rid­ing pass con­do­mini­ums in Zhengzhou yes­ter­day. China’s growth slipped to a seven-year low in the third quar­ter de­spite am­ple stim­u­lus and a red-hot prop­erty market in the world's sec­ond-largest econ­omy.

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.