The Philippines, India and Korea are all likely to follow Bank Indonesia by hiking interest rates over the next couple of months. But unlike Indonesia, these three are set to tighten policy from a position of relative strength. In the event that the growth outlook took a turn for the worse, they would put tightening on hold.
In contrast, the priority for policymakers in Indonesia will remain safeguarding financial stability. Interest rates are therefore likely to continue to rise for as long as the rupiah remains under downward pressure, even if this causes a sharp slowdown in growth.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services