First Indonesia rate hike likely in Q1 2010

Bank Indonesia (BI), as expected, today left its overnight lending rate at 6.5%, the first no change since mid-2008. The policy statement was neutral. BI is now more confident that Indonesia’s upswing will be sustained and strong but still expects inflation to slow further to end 2009. This means that policy rates will probably stay on hold for a while, with a first hike still likely in Q1 2010.

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