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Indonesia’s mixed growth and inflation supports Bank Indonesia on hold

DBS expects Bank Indonesia to keep its policy rate unchanged near term as Acting Governor Destry Damayanti focuses on non-rate measures and IDR liquidity amid a rangebound USDIDR.

Reported · Written up by our desk · Central Banks

DBS Group Research economist Radhika Rao said Indonesia’s onshore markets are looking ahead to the appointment of a new Bank Indonesia governor after Perry Warjiyo’s departure, with Acting Governor Destry Damayanti prioritizing non-rate measures and IDR liquidity.

The report points to a mixed growth and inflation backdrop, a weaker external balance, and a rangebound USDIDR, arguing those factors support an unchanged policy rate stance in the near term.

Rao’s view comes as market attention stays on how Bank Indonesia manages liquidity rather than tightening rates, according to the FXStreet write-up of DBS analysis.

FXStreet also noted broader FX moves alongside the Indonesia focus, including a rise in GBP/USD and EUR/USD, with the US dollar showing persistent weakness.

Latest closeEUR/USD 1.156 ▲0.4%|GBP/USD 1.347 ▲0.3%

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