Bank Indonesia Tightens
August 23, 2022
Bank Indonesia had been one of very few hold-outs against interest rate normalization but today announced its first rate increase a 25 basis point hike to 6.0% in November 2018. There had been five 25-basis point hikes in 2020 punctuated by a sixth drop of similar size in February 2021. That lowered the key rate to 3.50%, and today’s move merely reverses that last of many reductions. CPI inflation in Indonesia has meanwhile climbed from 1.5% in July 2021 to a 91-month high of 4.9% one year later, and rupiah vulnerability has become an additional worry to monetary officials.
Copyright 2022, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Bank Indonesia
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