- Domestic liquidity (as viewed from our net bank balance or NBB) remains tight, despite improvements among households and SOEs. While these could support consumption and investment growth down the road, the short-term impact may be more limited due to delayed effect to credit risk.
- Rupiah’s recent strength has been largely a function of weaker USD, offsetting continued NBB deficit which should predict depreciation. With BI cutting rates and reducing outstanding SRBI while the US Treasury potentially issuing more short-term bills going forward, the room for further Rupiah appreciation is likely limited.
