Bank Indonesia Starts 2017 By Maintaining The Key Rate At 4.75%
Bank Indonesia (BI) board of governors’ meeting maintained the BI 7-day (Reverse) Repo rate, the benchmark policy rate, at 4.75% on 19 Jan 2017. Moving forward, we expect the BI to slash its key policy rate by another 25bps in 2017 to support economic growth under stable IDR circumstances on:
1. Moderate inflation;
2. Manageable current account deficit;
However, IDR volatility could delay key policy rate cut.