AS the rupiah’s value swiftly declined in recent weeks, Bank Indonesia (BI) has boldly decided to defy the market. At its Board of Governors meeting on June 20, the central bank decided against raising interest rates. The central bank kept the BI-Rate at 6.25 percent. Bank Indonesia will attempt to defend the rupiah’s value solely through market operations for at least the next month.

Essentially, BI is challenging the market to