Widodo Call for Rates to Fall, Fall, Fall Raises Indonesia Risks
- `This is a negative development' for the country, says Natixis
- Fifteen of 24 analysts see central bank cutting on Thursday
Joko Widodo.
Photographer: Dimas Ardian/BloombergThis article is for subscribers only.
With Bank Indonesia seen cutting interest rates for a third month on Thursday, some economists say the president’s call for rates to "fall, fall, fall," is making the nation more exposed to any emerging-market selloff.
Fifteen of 24 analysts surveyed by Bloomberg see the policy rate being reduced 25 basis points to 6.75 percent, with the rest forecasting no change. The cuts have lured almost $3 billion of inflows to Indonesian local-currency sovereign notes this year, making them the best performers among Asian emerging markets.