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Indonesia Policy Rate 6.00% (consensus 6.25%) in Sep-24

• Bank Indonesia unexpectedly reduced its policy rate by 25bps to 6.00% amid controlled inflation and the need to stimulate economic growth, particularly domestic demand.
• The central bank's decision is also influenced by a more benign global financial environment, with declining inflation and monetary easing in advanced economies leading to increased foreign capital inflows.
• The stability of the Rupiah and healthy capital inflows provide room for further monetary easing, while macroprudential policies aim to support key sectors and boost economic growth.

Indonesia Policy Rate 6.25% (consensus 6.25%) in Aug-24

• Bank Indonesia’s decision to keep the BI-Rate steady at 6.25% aligns with expectations, reinforcing a pro-stability stance to manage inflation and Rupiah stability amid global uncertainties.
• The easing of global financial market uncertainty amid solid domestic growth influences interest rate decisions that focus on balancing inflation control and sustaining economic momentum.
• Bank Indonesia’s commitment to Rupiah stabilization and maintaining inflation within the target range remains central to its monetary policy, supported by effective interventions and optimized monetary operations.

Indonesia Policy Rate 6.25% (consensus 6.25%) in Jul-24

• Bank Indonesia kept its policy at 6.25%, aligning with market expectations to ensure inflation control and Rupiah stabilization amid ongoing global financial uncertainties.
• Future interest rate decisions will be influenced by persistent global financial market uncertainty, particularly the US monetary policy direction, and strong domestic economic growth driven by robust consumption and investment.
• Ensuring Rupiah stability and maintaining inflation within the 2.5 ± 1% target range remain central to Bank Indonesia’s strategy, supported by a mix of pro-market monetary operations, macroprudential policies, and digitalization efforts to foster economic resilience and growth.

Indonesia CPI Inflation 2.51% y-o-y (consensus 2.7%) in Jun-24

- Indonesia's CPI inflation in June 2024 decelerated to 2.51% year-on-year, below consensus and previous month figures, marking the lowest growth since September 2023 and indicating weak price pressures relative to historical averages.
- Core CPI inflation at 1.9% in May 2024 points to contained underlying inflation, but higher PPI inflation and robust M2 growth suggest potential future inflationary pressures.