Bank Indonesia meanders to the exit

Bank Indonesia (BI) left its policy rate at 6.5% today, as expected, and gave no indication that it is thinking about raising rates soon. We believe that the risks to inflation from keeping policy rates too low for too long are far higher than the risks to the economic upswing from moving rates up too early. We still expect a hike in Q1 2010, but the first move now looks like being in February or March.

Subscriber content

Read this in full, free

Start a free trial and use one of your 10 free starter credits to unlock this piece.


Free. 10 articles. No card required.
By completing this form you are agreeing to our Terms and Conditions for the provision of a free trial of Capital Economics' services. We take your privacy seriously and will not share your details with others without your consent. By providing your details, including your email address, you are consenting to Capital Economics sending you macroeconomic commentary and analysis. You can unsubscribe at any time. See our Privacy Policy for more information.

Already a client or trialist? Log in to read this.