Softer-than-expected October inflation data limits the case for Bank Indonesia rate hikes, prompting MUFG to warn of continued downside risks for the Indonesian rupiah.
October CPI and core inflation both surprised on the downside, according to MUFG, reducing the inflation-based case for Bank Indonesia to tighten policy. Less rate support and MUFG’s warning that currency risks linger point to a weaker rupiah, though the article gives no figures to size the move.
MUFG says the downside inflation surprises give Bank Indonesia limited justification to tighten policy, which can reduce support for the currency.
No. It only says October CPI and core inflation both surprised on the downside.
MUFG strategists report that Indonesia's October CPI and core inflation figures surprised to the downside. This cooling inflation data reduces the likelihood of Bank Indonesia tightening monetary policy, leaving the rupiah vulnerable to lingering currency risks.
MUFG suggests that downside inflation surprises provide Bank Indonesia with limited justification to tighten policy, which reduces the interest rate support typically provided to the currency.
No, the report notes that October CPI and core inflation surprised on the downside but does not provide specific figures or consensus estimates.