BI: Global Monetary Policy to Tighten as World Turmoil Escalates

Bank Indonesia (BI) Governor Perry Warjiyo stated that the re-escalation of the conflict between the United States and Iran in early July 2026 has created further economic uncertainty. The renewed intensity of the war was a particular focus for the BI board of governors.

He explained that traffic in the Strait of Hormuz has been disrupted once again, hampering the energy supply chains of various countries and causing world oil and commodity prices to rise again. This issue is expected to weaken global economic growth to a level of 3%, accompanied by heightened inflationary pressures reaching 4.5%. As a result, global benchmark interest rates will tighten. “Global monetary policy will be tighter,” Perry said during a press conference on the results of the BI board of governors’ meeting on Wednesday (22/7/2026).