Defending the rupiah with high interest rates and short-term "hot money" buys immediate stability, but it leaves the real economy resting on a fragile foundation.

The BI-Rate was raised to 5.25% to make rupiah assets more attractive to investors and encourage capital inflows into domestic markets.

Defending the rupiah with high interest rates and short-term "hot money" buys immediate stability, but it leaves the real economy resting on a fragile foundation.