Bank Indonesia (BI) today hiked both its main policy rate and the Fasbi rate by 50bp amid concerns about the currency and the outlook for inflation. Consumer price inflation is likely to rise as high as 8% y/y in the coming months after the government pushed ahead with plans to scale back its fuel subsidy regime. However, the inflation spike should prove temporary and so does not justify an aggressive tightening cycle.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services