0259 GMT - The selloff in Indonesia's equity markets could keep the central bank wary at its rate-setting meeting later in the day, DBS's Radhika Rao says in a note. Policymakers are caught between easing inflation amid subdued demand--which calls for policy support--and rupiah weakness and market volatility that limit the scope for cuts, the senior economist writes. A combination of triggers, including lack of clarity over budget spending, has spooked markets, she says. January-February inflation has declined on the back of policy measures led by electricity tariff cuts, while IDR has been unable to gain ground despite the sharp dollar correction this month, Rao adds. After a pause today, DBS expects BI to lower the policy rate by 50 bps this year as domestic sentiment steadies. (fabiana.negrinochoa@wsj.com)
(END) Dow Jones Newswires
March 18, 2025 22:59 ET (02:59 GMT)
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