The latest inflation data supports estimates that inflation in 2019 will remain low. We also see inflation in 2020 will be in BI's lower target range of around 3,0±1%, given the signs of no significant change in demand trends next year. BI started a new cycle of accommodative policy since July 2019 and has cut the policy interest rate four times. The easing trend needs to pause as BI needs to accumulate more foreign exchange reserves amid short-term consolidation in global financial markets. Liquidity in the banking system improved slightly. However, business activities have not fully responded because production has not increased. We will see an increase in credit growth starting from Q3-2020.

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