CIMB economists say Bank Indonesia could raise policy rates by 25 bps in Q4 if external shocks and inflation once again pressure the rupiah. They note a narrowing current-account deficit may support the rupiah in H2, but the Fed rate path, a stronger

2026-08-20

CIMB economists say Bank Indonesia could raise policy rates by 25 bps in Q4 if external shocks and inflation once again pressure the rupiah. They note a narrowing current-account deficit may support the rupiah in H2, but the Fed rate path, a stronger dollar and oil remain key external drivers. Domestic inflation risks are skewed to the upside due to El Nifio-driven food risks and potential Middle East energy-price volatility. With growth expected to slow in H2, CIMB expects BI to remain patient while closely monitoring global rates and the currency.