Archive

September 17, 2025
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Indonesia Cuts Rate to Support Growth

  • Bank Indonesia surprised markets with a 25bp rate cut to 4.75%, defying consensus expectations as growth concerns outweighed stability considerations.
  • The central bank enhanced policy transmission mechanisms and maintained rupiah stability despite global trade tensions and domestic political uncertainty.
  • Further accommodation appears likely given subdued credit growth, below-target inflation, and coordination with government stimulus measures supporting growth.
August 20, 2025
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Indonesia’s Surprise Summer Rate Cut

  • Bank Indonesia’s surprise 25bps cut to 5.00% signals proactive easing amid subdued inflation and global uncertainty.
  • The Rupiah’s strength and solid capital inflows provide policy space to support domestic growth despite external risks.
  • Further cuts are likely this year, contingent on exchange rate stability, fiscal support, and global economic developments.
July 16, 2025
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Indonesia: 25bp Rate Cut To 5.25% (Consensus 5.25%) in Jul-25

  • Bank Indonesia cut its benchmark rate by 25bp to 5.25% in July 2025, marking the fourth easing since September amid low inflation and strong foreign exchange reserves.
  • The decision reflects confidence in 1.87% June inflation staying within the 2.5±1% target range, the stable rupiah supported by a robust intervention framework, and the need for growth stimulus.
  • Future easing depends on continued inflation anchoring, currency stability, and global developments, including US trade policy and Federal Reserve actions affecting capital flows.
June 18, 2025
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Indonesia: Policy Rate Held At 5.5% (Consensus 5.5%) in Jun-25

  • Bank Indonesia maintained the BI-Rate at 5.50% in June 2025, in line with consensus expectations, citing stable inflation and a resilient rupiah as key factors.
  • The decision reflects a cautious approach amid persistent global uncertainties, with BI emphasising the need to preserve macroeconomic stability while supporting growth through accommodative macroprudential and payment system policies.
  • The interest rate outlook remains data-dependent, with the central bank signalling potential for further easing if inflation and currency stability persist, but maintaining a prudent stance given external risks and the need to attract foreign capital.

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