Indonesia’s central bank kept its key interest rate unchanged for a fifth straight meeting, extending a pause in monetary tightening as inflation slowed.
Central bankers in London and Jakarta will probably conclude this week that inflation poses little threat as they choose to keep borrowing costs unchanged.
Indonesia needs greater consolidation in its banking industry and will push small lenders to merge or seek strategic investors, the Financial Services Authority’s top official said.
Indonesian bonds were set for a second weekly advance and the rupiah strengthened after inflation eased last month to the slowest pace since June.
PT Bank Mandiri, Indonesia’s largest lender by assets, has opened a new office in Singapore to integrate its brokerage and investment-management units, seeking a foothold as rivals from the city state expand in its home country.
Indonesia’s rupiah climbed to a two- week high and stocks rallied before data that’s forecast to show the trade balance returned to surplus and inflation slowed.
Indonesia’s rupiah headed for its strongest quarter since June 2009 as a shrinking current-account deficit and slowing inflation lured inflows to Southeast Asia’s biggest economy.
Indonesia’s rupiah fell by the most in three months after the Federal Reserve cut stimulus that’s fueled demand for emerging-market assets and outlined a timeframe for U.S. interest rates to increase.
Indonesia’s rupiah was set for a sixth week of gains, the longest winning streak since April 2011, as overseas investors bought more of the nation’s stocks.
Indonesia’s rupiah forwards gained the most in a week before a central bank meeting where policy makers are forecast to keep the benchmark interest rate steady.