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Indonesia: A rate cut looks premature - TDS

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 15, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    According to analysts from TDS a rate cut in Indonesia still looks premature, so they expect the central bank to keep rates unchanged on Thursday.

    Key Quotes:


    “In Indonesia, there is a rate decision on Thursday. At the time of writing, 60% of economists surveyed by Bloomberg expect a 25bp cut to BI’s three main rates, i.e. they expect the reference rate to be lowered to 7.00%, the depo rate (FASBI) to 5.00% and the lending rate to 7.50%.”

    “We side with the minority view and expect all rates to be kept on hold. While we recognize that BI’s focus on IDR stability could prompt a cut already this week, a cut still looks premature to us as it would imply a big gamble from BI on the continued stability of IDR in the context of a very uncertain global macroeconomic outlook.

    We do expect additional monetary easing to occur this year, but not before Q3.”
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