According to a Reuters poll of economists, Bank Indonesia is anticipated to maintain its key policy rate at 6.00% on Thursday, likely holding it at this level until mid-2024. This expectation aligns with recent inflation rates within the bank's 2%-4% target range, indicating manageable price pressures in Southeast Asia's largest economy.
The unexpected rate hike of 25 basis points by Bank Indonesia on October 19 aimed to bolster the rupiah, which had seen an 8% decline against the dollar. Since then, the currency has recovered nearly 2%, trading around 15,540/$ as of Monday. The rupiah's resurgence was partly fueled by expectations of the U.S. Federal Reserve halting rate hikes, buoying not just the rupiah but other Asian currencies as well.
In the November 14-20 Reuters poll, a substantial majority of economists (27 out of 31) expected Bank Indonesia to maintain its benchmark rate at 6.00%. However, four economists predicted a quarter-point hike to 6.25%. While the median forecast suggests no interest rate changes until at least the second quarter of 2024, there's a divergence of opinions among economists regarding the future trajectory of the key rate.
