BI expected to reduce rates in 4Q 2020 – UOB

Lee Sue Ann, Economist at UOB Group, sees the Bank of Indonesia (BI) cutting its reference interest rate by 25 bps at some point in the October-December period.

Key Quotes

“Bi left its. Benchmark rate unchanged at 4.00% in August, reiterating that the decision is consistent with the need to maintain exchange rate stability, with inflation expected to stay low.”

“There is still a room for rate cut as growth risks mount. Hence, we are keeping our forecast of 25 bps cut in 4Q20, bringing the 7-day reverse repo rate to a lower level at 3.75%.”