27 May 2024 | News & Feature

BI Policy: Temporary respite amid lingering threats

  • BI has kept the BI7DRR at 6.25% in its latest meeting, following the modest recovery of Rupiah throughout the month.
  • Risks of IDR depreciation is still lurking, but BI is unlikely to raise rates to pre-empt such eventualities, given the expected slowdown in GDP growth in the coming months.
  • Domestic liquidity appears to be improving due to the recovery in exports and increased government spending in the beginning of the year. 
  • A future rate hike of around 25 – 50 basis points is not out of the question, given the frequent shifts in global rate expectations.