Bank Indonesia to cut rates again before year-end

Given the economy’s poor growth prospects and the subdued outlook for inflation, today’s rate cut by Bank Indonesia (BI) is unlikely to be the last in the current cycle. However, as the central bank hinted at in today’s statement, further rate cuts are likely to be gradual. Provided the rupiah continues to hold up relatively well, we see just one further 25 basis point rate cut this year.

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