23 September 2024
Macro & Market Perspective September 23, 2024
Key Takeaways
• Bank Indonesia cut the benchmark policy rate by -25 bps to 6% at its September 18, 2024 meeting, defying the majority consensus, which had expected the BI Rate to remain unchanged.
• BI expects the trend in headline and core CPI to remain within the target range of 2.5±1% for FY24E and FY25F.
• The Fed lowered the FFR by -50 bps to 4.75%-5.00% at its September 19, 2024 meeting, marking its first rate cut since March 2020.
• Based on FOMC summary of economic projection indicated the Fed sees core PCE inflation peaking at 2.6% this year, lower than June’s projection of 2.8%, before cooling to 2.2% in 2025 and 2.0% in 2026.
• Given the global trend of rate cuts in Europe, US, and China, has spurred foreign capital inflows into emerging markets including Indonesia, we expect BI to lower rates by at least -25 bps for FY24E.
