Heteronomics Archive

January 15, 2025

Indonesia: 25bp Rate Cut to 5.75% (Consensus 6.0%) in Jan-25

Bank Indonesia lowered the BI-Rate to 5.75%, surprising consensus expectations. It cited low inflation and the need to support growth amid subdued domestic demand and stable external conditions.
The Rupiah remains relatively stable due to robust reserves and proactive interventions, although global pressures from US fiscal policies and limited FFR cuts pose risks to external stability.
Future policy adjustments will hinge on domestic growth performance and global financial developments, with continued emphasis on macroprudential measures, financial digitalisation, and fiscal coordination to strengthen economic resilience.

December 18, 2024

Bank Indonesia held the BI-Rate at 6.00%, consistent with expectations, focusing on exchange rate stability and inflation control within the 2.5% ±1% target range amid heightened global uncertainty.
Strengthened pro-market monetary operations and macroprudential measures aim to attract foreign capital inflows and support credit growth in priority sectors, sustaining financial stability and growth momentum.
Future policy adjustments will depend on inflation dynamics, external shocks, and capital flow trends, as global risks, such as slower Fed rate cuts and rising US yields, constrain monetary policy flexibility.

November 20, 2024

Bank Indonesia held the BI-Rate at 6.00%, aligning with expectations, citing controlled inflation within its 2.5% ±1% target and global economic uncertainty as critical factors influencing its cautious stance.
The central bank's policy framework prioritises Rupiah stability amid geopolitical risks and external pressures, supported by robust foreign reserves of $151.2 billion and macroprudential measures encouraging credit growth in priority sectors.
Future rate adjustments will depend on inflation trends, external shocks, and global market dynamics, with monetary and fiscal policy synergy essential to sustaining economic resilience and growth into 2025.

October 16, 2024

Bank Indonesia kept the BI-Rate at 6.00%, aligning with market expectations, focusing on inflation control within the 2.5% ±1% target and maintaining Rupiah stability amid global uncertainties.
The central bank’s cautious stance reflects concerns about geopolitical risks and global market volatility, while future rate decisions will hinge on inflation trends, exchange rate stability, and economic growth prospects.
Ongoing policy measures aim to reinforce external stability with strategic currency interventions and supportive macroprudential policies to bolster domestic growth drivers.