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View all search resultsWith the rupiah continuing to weaken amid an oil and gas shock linked to the United States-Israeli war on Iran, Bank Indonesia (BI) has halved the threshold for monthly purchases of US dollars (USD) using rupiah. The move is intended to give the central bank more room to intervene in the currency market and safeguard foreign exchange reserves, particularly as pressures intensify from ongoing oil and gas supply disruptions. However, the policy may carry unintended consequences for the real economy.
A de-escalation in the United States-Israeli war on Iran has helped the rupiah bounce back somewhat after approaching its historic low, but economists say the Indonesian currency remains subject to a range of risks.
Inflation in Indonesia has slowed down in March despite surging global oil prices and elevated demand over the Idul Fitri holidays, but analysts warn of rising inflationary pressure as the Iran war drags on.
Bank Indonesia (BI) has left its benchmark interest rate unchanged as the United States-Israel war on Iran puts pressure on the rupiah, prompting the central bank to respond with forex market intervention and tighter foreign exchange controls.
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