Bank Indonesia Doubles Down On Rupiah Defense

Bank Indonesia hiked rates by 25bps to 5.50% in an effort to defend the weakening rupiah. SEB expects further tightening to a terminal rate of at least 6.00% due to ongoing fiscal and geopolitical pressures.

Key Takeaways

• 1.Bank Indonesia implemented a 25bps off-cycle rate hike, raising the policy rate to 5.50%.
• 2.SEB projects a terminal policy rate of at least 6.00% amid persistent IDR weakness.
• 3.USD/IDR faces upside risks towards 18,500 if the Middle East conflict persists.

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