Hike preemptive move to mitigate impact on inflation governor
Says global conditions fastchanging, unpredictable
Rupiah recoups some losses after hitting lowest level since 2020
Further weakening may mean more hikes economists

JAKARTA, Oct 19 Reuters Bank Indonesia unexpectedly raised interest rates on Thursday to arrest the rupiah39;s decline amid U.S. monetary tightening and rising geopolitical risks, with economists seeing possible further hikes should the currency39;s weakness persist.

The central bank hiked the benchmark 7day reverse repurchase rate by 25 basis points to 6.00, its second hike this year and its seventh since starting its tightening cycle in 2022. Its two other main rates were also hiked.

The benchmark is now at its highest level since June 2019.

All economists polled by Reuters had expected the bank to leave rates unchanged.

The decision came as the rupiah faced renewed pressure, hitting its lowest since 2020 earlier on Thursday as riskaverse investors prefer safe haven assets amid monetary tightening in advanced economies and tensions in the Middle East. The currency pared back some of its losses after the hike.

This increase is to strengthen stabilisation measures for the rupiah against the impact of increasing global uncertainty, and as a preemptive and forwardlooking step to mitigate its impact on inflation through imported goods, Governor Perry Warjiyo said.

Warjiyo noted that BI had discussed the timing of future monetary easing…