Archive

December 17, 2025
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BI Hold: Rupiah Trumps Cuts

  • BI-Rate held at 4.75% as expected, with a pause in the easing cycle signalled and limited 2026 cuts conditional on rupiah stability amid transmission lags.
  • Focus shifts to KLM incentives (Rp388T disbursed) to fix 24bps lending rate lag vs 67bps deposit drop. Future cuts hinge on credit growth revival.
  • The Rupiah at Rp16,685/USD constrains the outlook amid US tariffs/Fed divergence. Growth needs transmission fixes before more easing.
November 19, 2025
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Indonesia Holds Rates as External Headwinds Intensify

  • Bank Indonesia paused rate cuts at 4.75%, shifting focus from growth to rupiah stability. This outcome was no surprise to the consensus as external risks intensified.​
  • Further easing depends on rupiah stabilisation, not inflation alone. Elevated term premia and expanded FX operations reflect caution.​
  • Macroprudential incentives and FX measures aim to support growth while monitoring weak credit transmission after previous rate cuts.
October 22, 2025
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Indonesia Pauses Easing on FX Pressures

  • BI held rates at 4.75%, surprising consensus expectations of a 25bp cut. The pause addresses rupiah stability concerns amid USD5.26bn capital outflows.
  • Inflation is benign at 2.65% (core 2.19%) within the target range. Enhanced macroprudential policy is complementing easing with credit growth incentives.
  • Further cuts are likely as the Fed eases, depending on rupiah stability, credit transmission effectiveness, and fiscal-monetary policy coordination.
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.

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