- BI has kept the BI7DRR at 6.25% in its latest meeting, despite significant depreciation of the IDR throughout the month.
- The depreciation of IDR is driven by worsening sentiment of foreign investors towards Indonesia, as seen from the continued foreign outflows from the stock market.
- Due to the increasing FX risks, BI has issued the Rasio Pendanaan Luar Negeri (RPLN) policy for banks, which indirectly helps keep import from the real sector under control.
- BI still has room to increase interest rates by 25 bps this year, but the timing of the hike is difficult to predict.
