After cutting interest rates last month, which is in line with our assessment of the ideal BI Rate level, Bank Indonesia needs to be more careful in determining interest rates while waiting for the release of third quarter economic data to be able to achieve this year's inflation target. From the domestic side, the increase in credit growth yoy in July and very low core inflation provide a different picture of economic conditions. The combination of various conditions, such as central banks wanting to tighten monetary policy, the geopolitical risk of North Korea, and the combined impact of Hurricanes Harvey, Irma and Jose on the United States economy, makes the impact of external conditions on the Rupiah also ambiguous. We suspect the United States policy rate will probably not change until December. By holding interest rates at the current level, Bank Indonesia can immediately respond to changes in economic data or new developments in the coming months.

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