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Strategies & Market Trends : Indonesia Fund (IF)

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From: Microcap Analyst7/10/2007 10:53:26 AM
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Indonesia cuts rates by 25bps, continues easing cycle as inflation drops.

Bank Indonesia (BI) cut its policy rate by 25bp to 8.25% as expected on July 5, 2007, citing slowing inflation as the primary reason. This marks the 13th rate cut since April 2006, and brings cumulative easing since the beginning of this cycle to 450bp.

Inflation was only running at about 6% in May-June 2006, down significantly from the 15% rate in 2006.

The exchange rate has remained stable as high commodity prices on the country's exports have led to trade surpluses, and capital inflows have been positive.
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