- Bank Indonesia reported a slight decrease in FX reserves to USD 150.2 Bn in November 2024, even though the rupiah experienced a significant depreciation. The depreciation was mostly driven by global conditions, while domestic conditions have not worsened too much.
- However, foreign capital flows worsen, as foreign ownership of SRBI declines along with outflows in bond and equity markets. In addition, Trump effect is unlikely to have been full priced in.
- BI might use SRBI to address Rupiah volatility by increasing its yield but may face a dilemma: between intervening, allowing the Rupiah to adjust to some degree, or accepting slower loan growth.
