Asia Week Ahead: Chart of the week: 18 - 22 May

Research evidence excerpt

Asia Week Ahead: Chart of the week: 18 - 22 May

Deutsche Bank

Research

Economics Date

Asia Week Ahead 15 May 2026

Chart of the week: 18 - 22 May

Juliana Lee

Week Ahead Chief Economist

We expect Bank Indonesia to keep its policy rate unchanged on 20 May. While +65-6423-5203

the rupiah has been under pressure, the central bank has been utilizing a host of

existing and new measures to support the currency while holding its policy rate Kaushik Das

Chief Economist at 4.75% to facilitate credit growth. Inflation has also returned to BI’s 1.5-3.5% +91-22-7180-4909

target in April and is expected to stay within this range in the months ahead, as

our baseline is for the government to keep subsidized fuel prices unchanged Yi Xiong, Ph.D.

through December 2026. Although subsidy bills will stay elevated in the near Chief Economist

+852-2203-6139 term, alongside elevated oil prices, DB’s baseline forecast is for Brent to fall to

US$78/bbl on average by Q4 2026 from $96 in Q2, which should gradually ease Junjie Huang

the strain on Indonesia’s budget and reduce the risk that domestic fuel prices Economist

have to be raised. This should thus allow BI to maintain its policy settings in its +65-6423-6699

coming meeting. See Indonesia: Keeping track of fuel subsidies for details.

Deyun Ou

Economist

+852-2203-6166

Figure 1: Inflation expected to remain within BI's target

Source: Deutsche Bank Research, Haver Analytics

GMTGMT

The latest Xi-Trump summit signals a continued stabilisation in U.S.-China 09:13:5609:13:56 relations. The two leaders agreed to pursue a “constructive relationship of

strategic stability,” aimed at preserving stable economic and trade ties,

expanding practical cooperation, and strengthening communication and

coordination on international and regional issues.