Bank Indonesia kept its benchmark interest rate unchanged at 5.75% while implementing a 'policy mix' to stabilize the rupiah and support economic growth. The central bank cut the reserve requirement ratio by 2 percentage points, freeing over $10 billion for lending, and raised the deposit facility rate to 5% to attract capital inflows. Governor Destry Damayanti emphasized the need to balance competing objectives amid persistent external pressures, including MSCI's potential downgrade of Indonesia's emerging-market status.
The rupiah edged lower to 18,005 per dollar, while the benchmark stock index rose 0.5%. Analysts warned that the mixed policy signals could undermine investor confidence and fuel further currency pressure. The moves come as policymakers under President Prabowo Subianto strive to bolster the currency, reassure investors, and sustain growth in Southeast Asia's largest economy.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing