Bank Indonesia likely to cut key rate due to coronavirus risks – Reuters poll

According to the latest Reuters poll of economists, Bank Indonesia (BI), the Indonesian central bank is expected to cut the benchmark interest rate  at its policy review meeting this Thursday, resuming its easing cycle to cushion the negative economic impact of the coronavirus outbreak.

Key Findings:

“Sixteen of 28 economists in the survey expected BI to cut the benchmark 7-day reverse repurchase rate by 25 basis points (bps) to 4.75% at a two-day policy meeting that ends on Thursday.

The other 12 predict BI will hold the rate at 5.00%.

Advocates for leaving rates unchanged believe uncertainties caused by the coronavirus were a reason not to cut rates.

Chief Economics Minister Airlangga Hartarto forecast an up to 0.3 percentage point reduction in Indonesia’s GDP growth this year if China’s growth lost between 1 to 2 percentage points.”

USD/IDR rebounds from a three-day low of 13,652 and looks to regain the 13,700 level, at the time of writing.