Despite pressures from the political arena and the business community, controlled inflation, as well as the positive reaction of Indonesian assets to the Federal Reserve's 0.25 percentage point interest rate hike yesterday (16/12), Bank Indonesia decided to remain committed to its relatively tight monetary stance as there could still emerge pressures on the Indonesian rupiah in the period ahead as a consequence of higher US interest rates. So far this year the rupiah has depreciated nearly 13 percent against the US dollar so far this year.

Bank Indonesia will monitor external risks stemming from the Fed Fund Rate hike and the economic slowdown in China before deciding to change its interest rate environment.

Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) appreciated 0.16 percent to IDR 14,028 per US dollar on Thursday (17/12).

Indonesian Rupiah versus US Dollar (JISDOR):

| Source: Bank Indonesia