Indonesia: Growth-inflation mix supports steady BI stance – DBS
DBS Group Research economist Radhika Rao notes Indonesia’s onshore markets are focused on the appointment of a new Bank Indonesia Governor after Perry Warjiyo’s departure, with Acting Governor Destry Damayanti prioritising non-rate measures and IDR liquidity.
DBS Group Research economist Radhika Rao discusses Indonesia's mix of growth and inflation, which supports the Bank Indonesia's steady policy rate stance. The country's upcoming appointment of a new governor, after Perry Warjiyo's resignation, adds to the anticipation. The acting governor, Destry Damayanti, is focusing on non-rate measures and liquidity in IDR.
The report highlights a rangebound USDIDR, a weaker external balance, and a mixed growth-inflation backdrop, all contributing to the stable policy rates. The 2Q GDP growth report is expected to show a strong 5.3% year-on-year increase, despite the energy shock, compared to 5.6% in Q1.
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