Video: Where Are Funds Flowing to Capitalise on High Interest Rates?

Bank Indonesia (BI) again raised its benchmark interest rate by 25 basis points at the June 2025 Board of Governors Meeting, bringing the total increase over the past month to 100 basis points, with the BI Rate now at 5.75%. Recapital Asset Management President Director Nurdiaz Alvin Pattisahusiwa assessed that BI’s policy is inseparable from efforts to stabilise the Rupiah exchange rate, which has strengthened to around Rp 17,800 per US Dollar. In terms of asset allocation, the rate hike has made the Indonesian money market very attractive, although bonds are somewhat depressed, with the 10-year government bond yield briefly touching 7.5%, and the stock market is being driven by foreign capital outflows. High interest rates are being exploited by investors to enter the money market and deposits in order to capitalise on the elevated rates.