ANZ TIPS HIGHER INTEREST RATES IN INDONESIA, LOWER IN INDIA

SINGAPORE – ANZ Bank is tipping a further interest rate increase in Indonesia, to 6%, in the fourth quarter of this year – and believes there is now room for India to cut rates to 7% at its meeting on June 17. ANZ says a rate cut in Indonesia would provide some offset to the inflationary impulse from administered fuel price rises, with Bank Indonesia wanting inflation to remain within its target of 4.5% plus/minus 1% over coming quarters. In India, wholesale price inflation (WPI) for April at 4.89% was much weaker than market expectations, providing a second consecutive downside surprise.