- Hawkish expectations now seem inevitable, as the prolonged war has eroded market confidence in the Fed's ability to control inflation, thereby driving up UST yields.
- BI may further inject liquidity to the market, risking Rupiah depreciation, while BI's FX interventions increasingly rely on short-term debt.
- FX interventions come at the cost of net reserves, while recovery of the reserve ultimately hinges on current account improvement.
