Bank Indonesia (BI), led by Governor Agus Martowardojo kept is policy rate unchanged at the monetary policy meeting held Thursday, while leaving room for a rate cut in the upcoming new year.
BI left the benchmark interest rate at 4.75 percent for the third straight month. This followed the aggressive 150 basis points of cuts in the first nine months of this year.
At this stage, the BI is in a wait-and-see mode given the increasing volatility in the global markets. That said, growth momentum remains sluggish, with 2017 growth seen at 5.3 percent and still below the potential growth rate of 7 percent, Commerzbank reported.
Meanwhile, inflation is expected to remain well contained within BI’s target of 3–5 percent and the current account remains at still manageable levels.
"Against this backdrop, we expect BI to remain accommodative and to deliver one more rate cut in 2017," the report mentioned.


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