We have changed our forecast that Bank Indonesia (BI) will raise its policy rate on Thursday and now believe that the reference rate will be held at 6.75%. This is because headline inflation continues to trend lower, while recent data suggest that global growth is entering a soft patch. Nonetheless, the economy is set for above-trend growth and the policy rate remains historically low. The upshot is that we still think BI will eventually react to rising demand-pull pressures and expect the tightening cycle to resume in Q3.