Faced with market turbulence caused by MSCI's two-level downgrade warning, the Bank of Indonesia chose to keep the benchmark interest rate unchanged and continue to rely on targeted tools to stabilize the Indonesian rupiah. Bank Indonesia kept the Bi-rate policy interest rate at 5.75% on Wednesday. Of the 38 economists surveyed by Bloomberg, 19 held this forecast, while the other half had previously predicted interest rate hikes. The central bank raised interest rates by a total of 100 basis points earlier this year, and interest rates have remained unchanged since July. The resolution reflects the Bank of Indonesia's concern that it is unwilling to tighten monetary policy prematurely and slow down the growth of Southeast Asia's largest economy. Earlier, MSCI warned that Indonesia may be directly downgraded from an emerging market to an independent classification, skipping the frontier market that the market was originally worried about. The news triggered the biggest decline in the Indonesian stock market in nearly 30 years, and the bond market and exchange rate were simultaneously under pressure. Bank Indonesia Governor Destry Damayanti said in a statement that global economic prospects are “sluggish” due to high oil prices, inflationary stickiness, and weak growth; while Indonesia's domestic economy relies on consumer consumption and government stimulation, it is showing “steady” performance.

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