KONTAN.CO.ID - JAKARTA. Indonesia's central bank has scope to unwind 2018's interest rate hikes "cautiously", but may not have room for further cuts in reserve requirements of banks, the International Monetary Fund said in its review of Southeast Asia's biggest economy. In its annual Article IV report published on Thursday, the IMF said given inflation risks appear contained "authorities have space to partially and gradually unwind the interest rates hikes adopted in response to the 2018 EM (emerging market) selloff, unless significant capital account pressure re-emerge, but need to proceed cautiously." Bank Indonesia (BI) raised interest rates six times last year by a total of 175 basis points to defend the rupiah amid outflows triggered by U.S. rate increases and the U.S.-China trade war.
IMF sees room for 'cautious' Indonesia rate cuts, but not RRR reductions
KONTAN.CO.ID - JAKARTA. Indonesia's central bank has scope to unwind 2018's interest rate hikes "cautiously", but may not have room for further cuts in reserve requirements of banks, the International Monetary Fund said in its review of Southeast Asia's biggest economy. In its annual Article IV report published on Thursday, the IMF said given inflation risks appear contained "authorities have space to partially and gradually unwind the interest rates hikes adopted in response to the 2018 EM (emerging market) selloff, unless significant capital account pressure re-emerge, but need to proceed cautiously." Bank Indonesia (BI) raised interest rates six times last year by a total of 175 basis points to defend the rupiah amid outflows triggered by U.S. rate increases and the U.S.-China trade war.