Due to the minimal pressure on the rupiah currency, Bank Indonesia may maintain its current interest rates as consumer spending slows and ahead of the general elections, promoting economic growth. [Elections Are a Huge Boon for Indonesia Economy, ETFs]
“This may slow the narrowing of the current account deficit (CAD) to the level that BI sees as sustainable (i.e., 2-2.5% of GDP); we forecast a CAD at 2.7% of GDP this year,” Normura Securities analyst Enrico Tanuwidjaja said in the article. “Therefore, we believe BI can afford to stand pat next week.”
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Max Chen contributed to this article.