Latest news with #rupiah
Bloomberg
22-05-2025
- Business
- Bloomberg
Indonesia Set for More Rate Cuts on Growth View, Analysts Say
An improving market sentiment will pave the way for Indonesia's central bank to better balance its pro-growth stance with ensuring stability in the financial markets, according to analysts. Bank Indonesia will not hesitate to stabilize the rupiah through intervention amid economic uncertainty, Governor Perry Warjiyo said after reducing the BI-Rate by 25 basis points on Wednesday. The central bank also lowered its 2025 gross domestic product growth forecast to a range of 4.6% to 5.4%.
Reuters
19-05-2025
- Business
- Reuters
Bank Indonesia to cut rates on May 21 as rupiah stabilises: Reuters poll
BENGALURU, May 19 (Reuters) - Bank Indonesia (BI) will resume its easing cycle on Wednesday with a quarter-point interest rate cut as the rupiah's recent strength gives the central bank room to focus on supporting economic growth, a Reuters poll of economists found. Southeast Asia's largest economy grew 4.87% last quarter, its slowest pace in three years, while the rupiah recovered from April losses, easing pressure on BI to keep monetary policy tight. April inflation rose to be within the central bank's 1.5%-3.5% target range, official data showed. The bank has kept interest rates unchanged for the past three months. BI Governor Perry Warjiyo said in April the central bank's short-term priority was to stabilise the currency, saying: "Once stability is maintained, the room for a rate cut will be more open and that would be the time to decide on future interest rate policy." Since then, the rupiah has strengthened over 2.4% against the U.S. dollar. More than 60% of economists, 20 of 32, in a May 14–19 Reuters poll forecast BI will cut its benchmark seven-day reverse repurchase rate (IDCBRR=ECI), opens new tab by 25 basis points to 5.50% on May 21. The remaining 12 expected no change from 5.75%. The overnight deposit and lending facility rates were also forecast to be lowered by 25 basis points to 4.75% and 6.25%, respectively. "After an extended pause, BI is expected to lower rates in May, tapping into the recent window of currency appreciation as well as an improvement in risk appetite after the recent U.S.-China bilateral tariff cuts," said Radhika Rao, senior economist at DBS Bank. Among those who provided a longer term outlook on rates, 55% of economists, 15 of 27, expected the key rate to be 5.25% by the end of the third quarter. Beyond that, there was no clear consensus among economists on where rates would be. Projections for 2025 varied widely, with some economists expecting just a 25 basis points cut and others predicting as much as 100 basis points of easing. But median forecasts showed the end-year policy rate at 5.25%, down only 50 basis points from the current level as economists weighed the impact of recent volatility in the rupiah. The rupiah is projected to trade at 16,500 per U.S. dollar by the end of the third quarter, about 2.5% weaker than at the start of 2025, a separate Reuters poll showed last month. Several economists in the poll said the currency outlook may limit BI's ability to pursue aggressive rate cuts to support growth, given its mandate to maintain currency stability. "BI will be more gradual in its approach to rate cuts this year given IDR volatilities. But it will remain opportunistic and cut by more if IDR stability can be upheld for longer periods of time," said Lavanya Venkateswaran, senior ASEAN economist at OCBC Bank. (Other stories from the May Reuters global economic poll)
Bloomberg
19-05-2025
- Business
- Bloomberg
Indonesia Rupiah to Extend Rally on Fiscal Hopes, Weak Dollar
Indonesia's rupiah is set to extend gains in the second half of the year on hopes over prudent fiscal management and a bearish outlook for the US currency, analysts say. The currency is likely to strengthen more than 4% from Friday's close of 16,440 per dollar in the fourth quarter, according to TD Securities, one of the rupiah's top forecasters. Citigroup Global Markets predicts the currency will appreciate to about 16,000 next year, while ING Financial Markets forecasts it will reach 15,200 by the end of December.
Bloomberg
08-05-2025
- Business
- Bloomberg
Indonesia Reserves Drop Most in Almost Two Years on Rupiah Woes
Indonesia's foreign-exchange reserves saw the biggest drop in nearly two years after the central bank ramped up market intervention to cushion the sliding rupiah last month. The stockpile fell by $4.6 billion to $152.5 billion in April, Bank Indonesia said in a statement on Thursday. The decline, the biggest since May 2023, was due to the government's external debt payments and the central bank's rupiah stabilization measures as the global market was roiled by the US announcement of so-called reciprocal tariffs.
CNA
07-05-2025
- Business
- CNA
Indonesia central bank seeks 'balance' between growth and price stability
JAKARTA :Indonesia's central bank is focused on pushing economic growth without compromising on price stability, including the exchange rate, a senior official said on Wednesday, as the rupiah weakened again amid rising tensions between India and Pakistan. In the current environment, the central bank will try to find the "optimal balance" between price stability and economic growth, said Juli Budi Winantya, a director in the economic and monetary policy department of Bank Indonesia. Current economic growth was still below potential, but the central bank's aim was to push for growth without compromising stability, he told an economic seminar when asked about the policy rate outlook. Indonesia's first quarter economic growth was 4.87 per cent, the slowest in more than three years, but roughly in line with market expectations, official data showed on Monday. "We should push economic growth further," Juli said. "BI policy is to try to find optimal balance between maintaining stability and pushing growth." BI's latest 2025 growth outlook for the largest economy in Southeast Asia was slightly below the mid-point of a 4.7 per cent to 5.5 per cent range. It has cut interest rates twice since September to try and stimulate economic activity, but has paused its easing cycle to focus on keeping the rupiah stable. The central bank said it would maintain its presence in the foreign exchange market to shore up confidence, the bank's head of monetary management Erwin Gunawan Hutapea told reporters separately. The rupiah has strengthened since hitting a historic low in early April, but weakened 0.55 per cent on Wednesday to 16,535 a dollar amid rising geopolitical concerns in India and Pakistan and ahead of the conclusion of the U.S. Federal Reserve's monetary policy review. Erwin said foreign investors had begun buying Indonesian assets again, including during the government's bond auction this week, which would support the rupiah, but he warned that domestic U.S. dollar needs for dividend repatriation and foreign debt payments could affect exchange rate movements in coming months. To support growth, BI has focused its open market operations on expanding liquidity, including by gradually reducing the level of outstanding BI certificates (SRBI), Erwin said. "We want BI's operations to have expansionary impact, supporting growth," he said. "As part of that, gradually we have reduced outstanding SRBI. ... so far by 40 trillion rupiah since the end of 2024."
