Escalating tension in the Middle East, particularly between Iran and Israel, has sparked conflicts, including missile attacks and airstrikes. This geopolitical instability poses risks to Indonesia’s fixed income market, exacerbated by the potential impact of oil prices rising to US$100 per barrel, capital outflow, and IDR depreciation. The dilemma faced by the Government and Bank Indonesia involves choosing between Pro-Growth policies and stabilizing fiscal costs to manage the Rupiah’s value. Maintaining the BI rate amid these challenges could signal support for economic growth but might lead to increased fiscal costs. Comprehensive coordination between BI and the government is crucial to stabilizing the Rupiah and implementing preemptive growth-oriented policies.