BI meeting takeaway: BI concluded a monthly Board of Governors meeting on Thursday, which was continued by investors' session in the evening that ensued. Key points from the session:
In its monetary decision, Bank Indonesia decided to hold policy rate at 6%, lending facility rate 6.75% and deposit facility rate 5.25%, in line with consensus and our estimate.
Its means to support the recently turbulent market are therefore by (1) maintaining countercyclical capital buffer ratio at 0%, (2) holding macroprudential liquidity support (PLM) at 4% with repo flexibility at 4%, and (3) keeping macroprudential intermediation ratio (RIM) at 84-94%.
BI has generally remained optimist, highlighting improvement performance of 1Q19 CAD and not touched any issue pertaining latest weak trade realisation. Yet, it acknowledged some potential setbacks in growth across Java, Kalimantan, and Papua and the emerging need to pursue serious effort to mitigate risks from growth reduction.
During investor call, investors concerns mostly evolved around (1) BI's rate view ahead given BI still assumes 1x increase in FFR (market has reversed expectation for the FFR to decline, rather than increase), (2) recent fluctuation in the market, as well as (3) the rupiah volatility. The central bank has appeared to be more wary, albeit remained reserved about issue no 1 & 2. The only hint came in form of its statement about willingness to cut rate to promote growth, although this measure is to be taken given data confidence. (IndoPremier).
Sumber : IPS RESEARCH
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