- The recent trend in IDR and liquidity appears to constrain the possibility of a rate cut, but the need to stimulate growth should be at the fore.
- Rate reduction aimed at bolstering business confidence would lead to stronger growth expectations, attracting inflows and benefiting the IDR.
- An increasingly hawkish Fed would reduce the scope for rate cut, limiting BI’s room for future reductions if they choose to delay now.
HIGHLIGHTS
- The Two Pressing Factors
- Perception vs Reality
- Risks of Delaying Further Rate Cuts
- Capital market – Rising Yield Continues
- Fixed Income Flows – Foreign Outflows Escalate as BI Amplifies Intervention Efforts
- State Sharia Securities (SBSN) Auction Plan: November 19, 2024
This Week Key Focus
- Bank Indonesia (BI) Rate – November 2024 (Wednesday)
- China Loan Prime Rate - November 2024 (Wednesday)
- Indonesia Current Account – 3Q24 (Thursday)
Last week Key Events
GLOBAL UPDATES
- China’s total social financing, a measure of loan to private sectors, fell to CNY1,400bn in Oct-24)
- US NFIB Small Business Optimism Index in the US increased to 93.7 in Oct-24
- US Core Inflation rose 0.3% m-m
- International Energy Agency (IEA) estimates that global oil market face a surplus of more than 1mn bpd in 2025 due to softening Chinese demand
DOMESTIC UPDATES
- Indonesia Consumer Confidence fell to 121.5 in Oct-24
- Indo Retail Sales grew by 4.8% y-y in Sep-24
- The Ministry of Manpower, through one of its general director, hinted that the next year Minimum Provincial Wage (UMP) will abolish the use of alpha ranging from 0.1-0.3
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