Economics
One of Asia’s Most Aggressive Rate Hikers in 2018 Looks for the Right Time to Cut
- Central bank was among the most aggressive rate hikers in 2018
- Economists expect benchmark interest rate to be cut gradually
A sign sits above the entrance to the Bank Indonesia in Jakarta, Indonesia.
Photographer: Dimas Ardian/Bloomberg
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Indonesia’s central bank, one of the most aggressive interest rate hikers in Asia last year, is taking its time to lower rates.
Even with the U.S. Federal Reserve signaling it may ease soon and peers including India, the Philippines and Malaysia already cutting, Bank Indonesia is worried about scaring off foreign investors if it moves too much or too fast. It needs foreign inflows to support the rupiah and to fund the current account deficit, two of the economy’s key vulnerabilities.