BMI said in a report that at a time when domestic policy concerns and renewed tension between the US and Iran are putting pressure on the Indonesian rupiah, it is expected that the Bank of Indonesia will raise interest rates by another 50 basis points to 6.25% before the end of the year. The agency expects the currency to continue to weaken despite recent interventions and policy tightening. The agency said that rising oil prices may increase Indonesia's import spending and heighten fiscal concerns, while lingering governance and policy uncertainty may continue to weigh on investor sentiment. However, BMI added that it is expected that Indonesia's pro-growth stance will limit the extent of further interest rate hikes.

BMI said in a report that at a time when domestic policy concerns and renewed tension between the US and Iran are putting pressure on the Indonesian rupiah, it is expected that the Bank of Indonesia will raise interest rates by another 50 basis points to 6.25% before the end of the year. The agency expects the currency to continue to weaken despite recent interventions and policy tightening. The agency said that rising oil prices may increase Indonesia's import spending and heighten fiscal concerns, while lingering governance and policy uncertainty may continue to weigh on investor sentiment. However, BMI added that it is expected that Indonesia's pro-growth stance will limit the extent of further interest rate hikes.