Domestic financial market movements next week will be influenced by\nthe release of several economic data points, such as Bank Indonesia\u2019s\n(BI) interest rate decision and the impact of the US central bank\u2019s\nbenchmark interest rate hike.<\/p>\n
Furthermore, the release of preliminary Purchasing Managers\u2019 Index\n(PMI) manufacturing data from several countries and developments in\nMiddle East tensions\u2014particularly following the heightened escalation\nbetween Houthi groups and Saudi Arabia\u2014will also be key market focuses\nnext week.<\/p>\n
Here are the key sentiments for next week:<\/p>\n
This week, specifically on Wednesday, BI will decide on the interest\nrate policy (BI Rate) during the September meeting of the BI Board of\nGovernors. This announcement will also mark the first meeting for Destry\nDamayanti since she was officially inaugurated as the definitive\nGovernor of BI on 2 September.<\/p>\n
According to market consensus, BI is expected to maintain its\nbenchmark interest rate at 5.75%. Meanwhile, the deposit facility and\nlending facility are also expected to remain at levels of 4.75% and\n6.5%, respectively.<\/p>\n
During the August meeting, while Destry was still serving as the\nActing Governor of BI, she stated that this decision remains consistent\nwith efforts to strengthen the stability of the Rupiah exchange rate\nagainst the impact of high global volatility caused by the war in the\nMiddle East, maintaining the inflation target of 2.5\u00b11% for 2026 and\n2027, and supporting sustainable economic growth.<\/p>\n
Alongside maintaining the benchmark rate at 5.75%, the BI Board of\nGovernors has decided to continue expanding incentive policies and other\nmeasures to increase foreign capital inflows and strengthen the\nstability of the Rupiah exchange rate, increase liquidity, and reduce\nliquidity segmentation in the money and banking markets, as well as\naccelerate the deepening of the money and foreign exchange markets\n(PUVA).<\/p>\n
Meanwhile, macroprudential and payment system policies remain\ndirected towards encouraging economic growth. Loose macroprudential\npolicies continue to be strengthened to drive economic growth through\nincreased credit\/financing to the real sector while maintaining\nfinancial system stability. Payment system policies are also directed\ntowards supporting economic activities through the expansion of digital\npayment acceptance, strengthening the payment system industry structure,\nand increasing the reliability and resilience of payment system\ninfrastructure.<\/p>\n
Next week, the market will also continue to monitor the impact of the\nUS central bank\u2019s (Federal Reserve\/The Fed) benchmark interest rate hike\nannounced at the Federal Open Market Committee (FOMC) on 15-16\nSeptember.<\/p>\n
Previously, The Fed decided to raise the Federal Funds Rate (FFR) by\n25 basis points (bps) to 3.75%-4.00%. All FOMC members agreed with the\ndecision, with a 12-0 vote and no opposing members.<\/p>\n
The Fed took this step because US inflation remains high and has not\nmoved quickly towards The Fed\u2019s 2% target. \u201cInflation remains high.\nToday\u2019s policy will support the return of inflation more quickly towards\nthe Committee\u2019s 2% target,\u201d The Fed wrote in its official statement.<\/p>\n
This decision simultaneously changed the direction of US monetary\npolicy. Throughout 2024 and 2025, The Fed had been actively cutting\nrates until the upper limit dropped from 5.50% to 3.75%. However,\npersistent inflationary pressures have forced The Fed to apply the\nbrakes again. Interest rates have been raised for the first time under\nthe leadership of Kevin Warsh.<\/p>\n
Tensions in the Middle East have not ended and will remain a market\nfocus next week. Previously, Houthi groups in Yemen claimed to have\nlaunched missile and drone attacks on several locations described as\n\u201csensitive areas\u201d in the Saudi Arabian capital, Riyadh, on Saturday\n(19\/9\/2026).<\/p>\n
According to Reuters and CNA, the attack occurred hours after flames\nand thick black smoke were seen near the main airport in Riyadh. Saudi\nArabia subsequently confirmed that the Houthis attempted to attack\nRiyadh using ballistic missiles. This marks the first attack targeting\nthe Saudi capital since the escalation of the conflict with the\nIran-backed Houthi group increased in July.<\/p>\n
The Saudi-led military coalition stated that the missiles were\nsuccessfully intercepted and destroyed by air defence systems before\nreaching their targets. There were no reports of casualties or damage\nresulting from the attack. However, several residents reported hearing\nexplosions and seeing plumes of smoke around the airport area.<\/p>\n
Video and photo footage from Reuters shows massive columns of black\nsmoke rising high from the area near King Khalid International Airport\nin Riyadh. In one recording, flames were visible in an area suspected to\nbe a fuel storage tank.<\/p>\n
The Houthis did not specify the targets they attacked in Riyadh.\nHowever, the group claimed to have also attacked facilities belonging to\nthe Saudi energy giant Aramco in the city of Yanbu, one of Saudi\nArabia\u2019s main oil export hubs on the Red Sea coast. The Houthis stated\nthe operation was carried out in retaliation for attacks on the Yemeni\ncapital, Sanaa.<\/p>\n
In addition to Riyadh, Saudi Arabia claims to have thwarted other\nattacks targeting the regions of Bish, Farasan, Taif, and Yanbu.<\/p>\n
These tensions could prolong market fears regarding the end of the\nMiddle East conflict, which could make energy commodity prices, such as\ncrude oil, difficult to decline and potentially lead to higher\ninflation.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/global-turmoil-bank-indonesia-to-be-the-deciding-factor-1789905101", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }