The better-than-expected budget deficit, despite a widening current account deficit in 2018, has positively influenced market sentiment and helped the Rupiah appreciate to a level of around 14.000. Currently, the Rupiah is among the strongest developing country currencies since October 2018 due to the return of portfolio investment, despite the Fed's interest rate increase last month. The Fed's easing policy stance and the potential for a ceasefire in the US-China trade war have helped global investors start to look again at developing country assets. On the other hand, inflation is still weak, indicating slow and stable consumption, which is partly due to higher interest rates in 2018. Considering the stable domestic fundamental conditions, the implementation of the negative Tobin Tax, and the decline in external risks, we are of the opinion that Bank Indonesia needs to maintain its policy interest rate this month.

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