Indonesian Bonds Gain as Slower Inflation Boosts Rate-Cut Bets
- Government sees consumer-price gains around 3% by year-end
- Rate reduction most likely in January after Fed, Nomura says
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Indonesian sovereign bonds rose this week, pushing the two-year yield down by the most since early October, amid speculation cooling inflation will give the central bank more scope to cut interest rates.
Consumer-price gains eased for a third month in October, to 6.25 percent, and the government is forecasting a further slowdown to around 3 percent by the end of the year. Bank Indonesia cut the primary reserve requirement for lenders on Nov. 17 and left its benchmark rate unchanged, to provide support to the economy while guarding against further currency weakness.