Bank Indonesia, as expected, keeps its overnight benchmark steady, but it misses out on an opportunity to hike the Fasbi rate, Credit Suisse notes. BI in August raised the Fasbi rate, which correlates with interbank money market rates, by 25 basis points to 4.0% to help ease pressure on the IDR amid a persistent current account deficit. "We are concerned about Indonesia's ability to finance its external deficit in 2013, leading us to worry about the currency," Credit Suisse economist Robert Prior-Wandesforde says in the note. "A sharply weaker currency, could in turn force a reluctant central bank to raise rates, hitting growth down the line and denting asset markets," he adds.
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