Indonesia Set to Hold Rate as War, Fiscal Risks Pressure Rupiah

Bank Indonesia is poised to cut borrowing costs for a fourth consecutive month as it says it will go "all out" to support economic growth. Continued easing represents a dovish shift that should lower local financing costs and may pressure the rupiah while supporting Indonesian government bonds and equities. Watch for any guidance on the pace of further cuts and incoming inflation or growth data that could alter the policy path.

Analysis

Bank Indonesia is poised to cut borrowing costs for a fourth consecutive month as it says it will go "all out" to support economic growth. Continued easing represents a dovish shift that should lower local financing costs and may pressure the rupiah while supporting Indonesian government bonds and equities. Watch for any guidance on the pace of further cuts and incoming inflation or growth data that could alter the policy path.