With the increase in government regulated prices predicted to push inflation closer to the 4% target, we see that Bank Indonesia needs to maintain the RRR at 4,75% at today's meeting. Short-term foreign risks to the Rupiah have also tended to subside, considering that market players have factored in the Fed's interest rate hike into their calculations and changed expectations of interest rate increases to just one more increase in 2017. This allows Bank Indonesia to focus on domestic price levels .

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