Bank Indonesia today hiked its reference rate by 25bp to 6.75%. This is what we expected would happen, but was a surprise to the consensus. More hikes are on the way, and soon. We continue to anticipate that the reference rate will be lifted to 7.50% by mid-2011. Today’s move should also ultimately prove to be good news for Jakarta stocks too, and we have lifted our end-2011 forecast.
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