series of surprise economic policy changes by the government and Bank Indonesia (BI) has offered markets a dose of reassurance, succeeding where previous rhetoric fell short. However, experts caution that more concrete measures are required to sustain the positive momentum.
On Tuesday, the central bank hiked the interest rate by 25 basis points, which was a decision made outside the normal, scheduled board of governors meeting that this month is set to take place on June 18.
Another policy was also introduced during the day, namely a handshake deal among Deputy House of Representatives Speaker Sufmi Dasco Ahmad, State Secretary Prasetyo Hadi, executives from state-owned banks and state asset fund Danantara, who agreed that stock buybacks were necessary as a response to the recent stock market rout.
Before the day turned, state-owned energy giant Pertamina also increased the price of the most popular unsubsidized gasoline brand Pertamax, whose price had been held at bay even when the prices of other brands had gone up significantly not long after the Middle East conflict flared up.
The rupiah and the Indonesia Stock Exchange (IDX) Composite index both improved on Wednesday.
Read also: Pertamina hikes Pertamax prices by 32% amid high oil prices
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Economist Intelligence Unit (EIU) Asia analyst Tay Qi Hang said the measures the authorities had introduced the previous day “were an important factor” behind Wednesday’s rebound.