Bank Indonesia governor warns of prolonged global inflation risks
Destry Damayanti said persistent Middle East conflict made a near-term return to US$80-a-barrel oil difficult to envisage.
Bank Indonesia Governor Destry Damayanti warned that elevated oil prices could prolong global inflation and that sustained high US interest rates would have repercussions for Indonesia. She was speaking at the opening of Kadin’s 2026 national leadership meeting in Jakarta on 29 October.
Destry said she could not envisage crude returning to US$80 per barrel in the short term, particularly with conflict in the Middle East continuing. Both major crude benchmarks remained above US$100: Brent futures fell 82 cents, or 0.7 per cent, to US$114.50 per barrel at 01:32 GMT, while West Texas Intermediate dropped US$1.04, or 1 per cent, to US$101.74.
She linked expensive oil to inflationary pressure in the United States and the Federal Reserve’s decision to keep its benchmark interest rate high. US inflation was above 3.5 per cent against a 2 per cent target, she said, with bond yields also elevated.
Destry said higher US bond yields would affect Indonesia. The US 10-year yield had reached 5.3 per cent before easing to around 5 per cent, she said, still well above the 3 per cent level she described as normal.
