Indonesia's Central Bank Raises Rates to Stabilize Rupiah Amid Record Lows
Indonesia's central bank has unexpectedly increased its benchmark interest rate by 25 basis points, bringing the 7-day reverse repo rate to 5.5%. This decision aims to stabilize the rupiah, which has been experiencing significant depreciation against the U.S. dollar, reaching record lows. The rate hike is also intended to attract foreign investment and maintain inflation within the government's target range of 1.5% to 3.5% for 2026 and 2027. The move comes as Indonesia's stock market has seen a rapid decline, with the Jakarta Composite Index falling over 35% year-to-date. The central bank's actions are part of a broader strategy to bolster the currency and address rising inflation, which was recorded at 3.08% in May, surpassing previous estimates. 
