BMI expects Bank Indonesia to raise rates by a further 50 bps to 6.25% by
year-end as policy concerns and renewed US–Iran tensions weigh on the Indonesian
rupiah. The agency says the currency is likely to remain weak despite recent
intervention and policy tightening. Rising oil prices could boost Indonesia’s
import bill and heighten fiscal risks, while persistent governance and policy
uncertainty may continue to sap investor sentiment; BMI adds that BI’s
growth-supportive stance should limit the scope for further hikes.
