Analysts believe that Bank Indonesia may need to take more aggressive measures, including further interest rate hikes, to bring the rupiah back from near historic lows on a sustained basis. Bank Indonesia pledged last week to make "necessary adjustments" to its policy tools to maintain rupiah stability. This follows increased foreign capital outflows driven by rising global yields, higher oil prices, and the risk of MSCI potentially downgrading Indonesia's emerging market status. Bank Indonesia had previously kept its key interest rate at 5.75%, opting to stabilize the exchange rate through foreign exchange intervention and hedging incentives rather than monetary tightening that could drag on the economy.