Bank Indonesia hiked its seven-day reverse repurchase rate to 3.75% from 3.5% – its first increase since November 2018, when the benchmark stood at 6%, surprising many analysts.

In a poll conducted by Reuters, 16 of 27 economists, or nearly 60%, said the central bank would keep the rate at 3.5%; the rest expected a hike of 25 basis points.

The inflation rate in Southeast Asia’s largest economy rose to 4.94% in July from 4.35% the month before. The July inflation rate was the highest since October 2015. Inflation exceeded Bank Indonesia’s target range of 2% to 4% as spillover from the Ukraine war added to price pressures.

The dollar-rupiah exchange rate is also under pressure. The Indonesian currency is approaching 15,000 per dollar, trading at around 14,892 as of Tuesday morning.