- Minutes from the July 2023 FOMC meeting confirm the Fed’s higherfor-longer outlook, which may send the Fed funds rate into parity with BI 7DRR by the remainder of 2023.
- The Fed’s hawkish signal, coupled with the increasingly dovish expectations on central banks in Asia, further underlines the challenge that could hit the Indonesian financial market.
- The still-open door for a Fed pivot scenario, albeit not in the near term, may encourage BI to step up market interventions to stabilise the domestic market in the short term rather than opting for other policies that may require higher commitment such as raising the policy rate.
