Bank Indonesia is expected to start hiking its benchmark interest rate by 150 basis points in the third quarter this year, UBS economist Edward Teather said Tuesday.
"In the next four months or so credit growth will rise and inflation will increase," he said, citing the reason for Bank Indonesia (BI) to increase its rate.
The BI rate now stands at 6.5 percent.
Teather said the Malaysian and Australian central banks have raised their interest rates, while the Singaporean central is set to increase its rate in the second quarter, prompting BI to follow suit.
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