Jakarta: Indonesia's central bank will keep interest rates on hold on Thursday, a Reuters poll showed, though some economists say a rate cut to bolster economic growth is coming - and one sees a possible trim next month.
All 23 analysts in the poll predicted Bank Indonesia (BI) will hold its seven-day reverse repurchase rate at 6.00 per cent, where it has been since hikes of 175 basis points (bp) between May and November 2018 to defend the then-ailing rupiah, report agencies.A slowing global economy and halt of US Federal Reserve policy tightening have shifted rate cut expectations in much of Asia to probable from possible.
Indonesian central bank officials have noted that a steady rupiah, backed by strong capital inflows and benign inflation, support policy easing, but say a narrower current account deficit is needed before rate cuts.
Surprise trade surpluses in February and March have made some economists anticipate a loosening cycle. Six of the seven analysts in the poll who gave views on the year-end expected lower rates then.
ANZ's Krystal Tan has pencilled in two 25-bp cuts. "The conditions for BI to unwind its earlier rate hikes are finally starting to come together," Ms Tan said. "Any signs of a dovish pivot in BI's policy messaging should open the door for a move as soon as May, followed by another in August."