- Fiscal expansion and higher CAPEX needs have created a global competition for liquidity, limiting the space for central banks to lower their policy rates.
- Souring foreign sentiment, along with the lack of improvement in the Rupiah’s fundamentals, means that the Indonesian economy is in no position to receive another BI rate cut.
- Accelerating loan growth in the past couple of months, and the increasing reliance on commercial banks to support growth, allow BI to focus more on Rupiah stabilisation.
