BANK Indonesia (BI) surprised markets by increasing its reference interest rate by 0.25 percent on Thursday, October 19. The BI 7-Day Reverse Repo Rate (BI7 DRRR) now stands at 6 percent, its highest level since 2019.

Not many analysts predicted that hike. Moreover, previously, BI had repeatedly conveyed its commitment to hold its interest rate steady for a while. This loose monetary policy is important to help the economy keep growing. On