The end of August to the beginning of September was marked by a sharp depreciation of the Rupiah, almost reaching IDR 15.000, although the pressure on the Rupiah has now relatively subsided. This weakening was mainly driven by global pressure coming from the external sector. The continuing domino effect of the crisis in several developing countries, from Turkey, Argentina, to South Africa, has encouraged investors to seek safety and leave developing countries. Moreover, the escalation of the trade war between the United States and China has again had a negative impact on the stability of the Rupiah. We see that Bank Indonesia's consistency and credibility in maintaining the exchange rate is strong enough so we see that Indonesia will not face a significant depreciation episode like Argentina, Turkey or South Africa. However, the potential for external pressure is still high and the current account balance continues to be negative, meaning BI needs to continue to anticipate potential market turmoil by raising the benchmark interest rate again at the upcoming Board of Governors Meeting (RDG).

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