The central banks of both Indonesia and Thailand are attempting to maneuver themselves in the aftermath of the recent Fed cut.
Higher rates in the U.S. have traditionally been a negative for emerging markets as U.S. investors typically send their dollars home in search of decent yields.
"Further Fed cuts will benefit Indonesia mainly through commodity channels, given the potential rally in commodity prices, especially with the news of the upcoming. Indonesia may also benefit from higher portfolio inflows , although the impact may be more limited given the renewed demand on the Chinese stock market," he told CNBC.
"If you look at the Jakarta composite index, one of the biggest sector drivers is the banking sector and we think that the banks will get portfolio flow coming in and that should, basically, help to boost their multiples," he said. Trading multiples are used by finance professionals to gauge the value of a stock.
Sumual added that the BI"may wait for more Fed cuts before resuming its rate cut campaign, as the central bank continues to seek balance over its pro-stability monetary policy and pro-growth macroprudential policies."
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