Bank Indonesia held its policy rate at 5.75% and shifted strategy to offer new incentives to support the rupiah instead of further rate hikes, amid concerns over the Middle East conflict and global inflationary pressures. It offered higher discounts on swap rates to hedge risks for foreign investors and provided spot and swap instruments denominated in Chinese yuan in offshore markets. Governor Perry Warjiyo said these incentives are more effective in attracting foreign capital inflows and managing the exchange rate without raising domestic interest rates. While headline inflation accelerated to 3.34% in June, core inflation is expected to remain below 3%, and the central bank maintained its 2026 growth forecast at 4.9% to 5.7%.