Indonesia central bank sees room for Q4 rate cut if rupiah stabilises

JAKARTA (Reuters) – Indonesia’s central bank governor said on Monday there could be room for an interest rate cut in the fourth quarter as the rupiah is expected to be more stable, but will focus its efforts to maintain currency stability for now.

The rupiah hit a four-year low at 16,475 per U.S. dollar last month due to a strong dollar and on concern about the spending plans of the incoming government.

The rupiah is stabilising after bouts of weakness in recent weeks and there should be a tendency to strengthen later this year due to an expected rate cut by the U.S. Federal Reserve, Bank Indonesia (BI) Governor Perry Warjiyo said.

BI expects the rupiah to trade at an average of between 15,700 to 16,100 per dollar this year, he told parliament. It was trading at 16,250 a dollar as of 0821 GMT.

“We will see if there is any room for easing in the fourth quarter,” he said. “For now our focus is maintaining currency stability.”

(This story has been refiled to fix the spelling of ‘stabilises’ in the headline)

(Reporting by Stefanno Sulaiman,; Additional reporting Stanley Widianto; Writing by Fransiska Nangoy; Editng by John Mair)


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