Indonesian rupiah hits record low, increasing rate hike pressure on Indonesia’s central bank
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Golden Ten Data reported on April 30 that CIMB economists Lim Yee Ping and Michelle Chia stated in a report that the Indonesian rupiah has fallen to a historic low against the US dollar, increasing pressure on Bank Indonesia to tighten its policy. Bank Indonesia has already strengthened support for the rupiah by increasing the issuance of local currency securities and offering higher yields, but these measures alone may not be enough to curb continued exchange rate volatility, raising the likelihood of further monetary policy tightening. This supports CIMB’s expectation of a 25 basis point rate hike in May. Additionally, first-quarter GDP data, which will be released next Tuesday and is expected to show solid performance, will provide Bank Indonesia with room to reduce policy support.
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