- BI held the benchmark rate at 5.75% at the Oct-26 meeting amidst global trends and pressures on the Rupiah, contrary to the market majority.
- Along with this move, BI reduced the reserve requirement (GWM) and adjusted the Macroprudential Liquidity Incentive (KLM), which are projected to inject up to IDR 190 trillion in liquidity.
- However, BI simultaneously raised the Deposit Facility rate by 25bps to ensure manageable liquidity levels and anchor the IndONIA rate (currently at 4.99%).
- Furthermore, BI reinforced its focus on currency stability by increasing incentives for DNDF transactions, but persistent global tightening could suggest the need of another rate hike before the end of the year.
