Lower-than-expected October inflation and Q3 GDP growth might not seem be an ideal situation for BI to suspend rate cut, but such move (or lack thereof) may be a necessary evil for the next few months. As major central banks, such as the Fed, ECB, and Bank of Japan started to normalize their monetary policy and reduce the size of their balance sheet, we expect some degree of selloff in emerging market assets, including Indonesia. We expect the resulting downward pressure on Rupiah to be rather manageable, as Bank Indonesia have ample foreign reserves to defend Rupiah and market has priced in the planned reduction in major central banks’ balance sheet. However, commitment to defend Rupiah from depreciation in coming months is directly at odds with the need to boost domestic consumption and inflation through rate cuts, and we expect Bank Indonesia to prioritize defending Rupiah. Bank Indonesia should resort to further rate cut only if inflation and Q4 GDP growth remains low.