How Long Can Bank Indonesia Hold the Line on the Rupiah?

Bank Indonesia’s aggressive intervention failed to support the rupiah. Indonesia’s macroeconomic management turned imprudent.

Yopie Hidayat

January 13, 2025

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THE inauguration of Donald Trump as the 47th President of the United States is just days away, and investors are growing increasingly anxious. Trump’s return is expected to drive inflation in the US higher, potentially triggering further interest rate hikes by the Federal Reserve. This prospect has roiled global financial markets, with the US dollar surging against a broad range of currencies.

Consider the US Dollar Index (DXY), which

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