Jakarta. Indonesian stocks jumped 1.56% on Wednesday after Bank Indonesia kept its benchmark interest rate at 5.75%, as improving US-Iran relations and easing oil prices lifted market sentiment.

Jakarta Composite Index (IHSG) rose 1.56%, with 448 stocks advancing, 186 declining and 159 unchanged. Trading volume reached 36.7 billion shares, with turnover of Rp 12.84 trillion ($720.84 million) across 1.9 million transactions.

Pilarmas Investindo Sekuritas said the central bank’s decision was a key market catalyst as BI sought to balance rupiah stability and domestic economic growth amid global uncertainty.

BI also maintained its Deposit Facility rate at 4.75% and Lending Facility rate at 6.50%, Deputy Governor Destry Damayanti said after the Sept. 22-23 Board of Governors Meeting.

“The decision remains consistent with our strategy to stabilize the rupiah amid persistent external pressures, while keeping inflation within target and supporting sustainable economic growth,” Destry said.

Indonesia’s foreign exchange reserves reached $146.5 billion at the end of August, equivalent to 5.4 months of imports or 5.3 months of imports and government external debt repayments, well above the international adequacy standard of around three months.

“Indonesia’s balance of payments needs to be continuously strengthened to support external resilience amid heightened global uncertainty,” Destry said.

Indonesia’s trade balance returned to a $120 million surplus in July after a $450 million deficit in June. Foreign portfolio investment recorded net inflows of $400 million in the third quarter through Sept. 21, supported by global bond issuance and inflows into government securities.

Citing IMF projections, Pilarmas Investindo Sekuritas said Indonesia’s external debt-to-GDP ratio is expected to decline from 29.7% in 2026 to 28.7% in 2031.

Pilarmas said positive developments in the US-Iran conflict also supported Asian markets. US President Donald Trump said US officials had held a very good meeting with Iranian representatives, while Iran said it could reopen the Strait of Hormuz within seven days if Washington reduced military pressure and lifted its blockade of Iranian ports. Saudi Arabia also plans to resume oil exports through its East-West pipeline in the coming days.

“These developments have also pushed global oil prices lower, providing positive sentiment for stock markets,” Pilarmas wrote in its Wednesday research note.

South Korea’s Kospi rose 0.9% to 7,080.92, while Hong Kong’s Hang Seng fell 1.1% and the Shanghai Composite Index declined 0.4%.

Investors remained cautious over the Federal Reserve’s policy outlook following its latest rate hike. Richmond Fed President Tom Barkin warned that inflation shocks could take time to subside, while Boston Fed President Susan Collins said she supported last week’s hike amid concerns inflation could remain above the 2% target.

Markets now price in a roughly 54% chance of another Fed rate hike in October.

On Tuesday, the S&P 500 edged down less than 0.1%, remaining near its record high. The Dow Jones Industrial Average fell 0.4%, while the Nasdaq Composite rose 0.5%.

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