- The speculation surrounding the end of BoJ’s NIRP experiment, driven by higher-than-expected wage growth, has uncertain implications for the Rupiah due to the narrowing policy gap and the potential unwinding of the JPY carry trade.
- BI’s bond-buying program helps to stabilise SBN yields, thereby encouraging banks to expand lending. However, this policy may distort market signals as low SBN yields could discourage investors from re-entering the market.
- The continued acceleration in loan growth poses a further threat to banks' liquidity conditions, as loans appear to be directed towards lower ROI projects.
