Bank Indonesia Cut Rate Again as Rupiah Strengthens

CEIC Gallery - March 22, 2016
  • Central bank decreased benchmark rate by 25 points
  • Bank Negara kept interest rate in Malaysia unchanged
  • Monetary policy meetings in Thailand and Philippines will be held this week
Central Bank of Indonesia cut benchmark rate for the third consecutive month to 6.75% in order to boost economic growth in the country. The 25-point cut comes after rupiah appreciated to 10-month high in March and foreign currency reserves stabilized at USD 98.3 billion in February. Bank Indonesia’s decision to continue easing monetary policy has been encouraged also by the Fed dovish statement to keep the Fed Fund Rate unchanged. On the other hand, the central bank of Malaysia, Bank Negara, decided to keep its policy rate unchanged at 3.25% due to high inflation in the country – in January, annual inflation picked up to 3.5%. Another two South Asian central banks will conduct meetings on monetary policy this week – Bank of Thailand and the Philippines’ central banks. Bank of Thailand is expected to hold rates at historically low of 1.5% as the risk of capital flight remains high, despite the dovish Fed decision last week. Although the inflation in Thailand remains negative, the central bank aims to refrains from excessive stimulus as it leans on government investing program to boost domestic demand. Bank of Philippines will likely keep rates unchanged too as the inflation in the country remains low. Discuss this post and many other topics in our LinkedIn Group (you must be a LinkedIn member to participate). Request a Free Trial Subscription. Back to Blog
22nd March 2016 Bank Indonesia Cut Rate Again as Rupiah Strengthens

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