Bank Indonesia expected to raise rates to 5.00 percent

A slim majority of economists polled by Reuters expect Bank Indonesia to raise its benchmark rate by 25 basis points to 5.00% this Wednesday. The move would aim to stabilize the rupiah, which has depreciated roughly 5% since late February due to geopolitical tensions and fiscal concerns.

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Bank Indonesia is expected to raise its benchmark seven-day reverse repurchase rate by 25 basis points to 5.00% on May 20, according to a slim majority of 16 of 29 economists polled. The weak rupiah, which has fallen 5% since a conflict involving the United States, Israel, and Iran began on February 28, has prompted the expectation. The rate hike reflects concern over currency depreciation amid geopolitical tensions.

Rupiah Weakness Drives Policy Shift

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