Rates On Hold, But Easing Cycle Not Over

BMI View: Bank Indonesia (BI) kept interest rates on hold in April, interrupting a policy of monetary easing that has been in place since April 2006, and has led to a 375bps reduction in the Target Rate. Growth in consumption and investment however, while accelerating, is still low, and we are of the opinion that a further easing of interest rates is in store. Indeed, given the moderate inflation levels and the central bank's forecast of 6.3% growth for 2007, we have revised down our year-end interest projection by 50bps to

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