Minimal local support for Indo bonds: ANZ

13 Jun 2013

While domestic bond performance will be boosted if Bank Indonesia decides to pump more liquidity in to the market, any easing will be limited given the need to control currency depreciation and high inflation.

The liquidity distortion in the banking system could prompt the Indonesian central bank to unleash its excess liquidity. This has the potential to support the local bond market, however the need to control foreign exchange volatility and inflationary pressures means that the impact could be limited.

Currently banks ...

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