JAKARTA (Multibagger) - Indonesia's central bank governor indicated on Monday that there may be an opportunity for an interest rate cut in the fourth quarter as the rupiah is projected to become more stable. However, the focus currently remains on maintaining currency stability.
The rupiah recently reached a four-year low of 16,475 per U.S. dollar amidst a strong dollar and concerns about the spending plans of the incoming government.
Following periods of weakness, the rupiah is now showing signs of stabilization and is expected to strengthen later in the year, partly due to an anticipated rate cut by the U.S. Federal Reserve, as stated by Bank Indonesia (BI) Governor Perry Warjiyo.
BI anticipates the rupiah to range between 15,700 to 16,100 per dollar on average for the year, with current trading at 16,250 per dollar as of 0821 GMT.
"We will evaluate the possibility of easing in the fourth quarter," Warjiyo mentioned. "At present, our primary focus is on preserving currency stability."
(This story has been refiled to correct the spelling of 'stabilizes' in the headline)
Analysis:
Indonesia's central bank is considering a potential interest rate cut in the fourth quarter as the rupiah stabilizes. This could lead to a stronger rupiah later in the year, supported by an expected rate cut by the U.S. Federal Reserve. Investors should monitor these developments closely as they may impact currency stability and financial markets.