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Indonesia: Policy Rate Held At 5.75% (Consensus 5.75%) in Apr-25

• Bank Indonesia maintained the BI-Rate at 5.75%, in line with expectations, with a cautious stance to safeguard price stability and currency fundamentals amid heightened global uncertainty stemming from US-China trade tensions.
• A resilient external position—anchored by a robust trade surplus, substantial reserves, and controlled inflation—has enabled the central bank to manage volatility while preserving policy flexibility.
• With inflation subdued and global headwinds intensifying, Bank Indonesia retains an easing bias, with future rate cuts contingent on inflation dynamics, Rupiah stability, and international capital flow conditions.

Indonesia: Policy Rate Held At 5.75% (Consensus 5.75%) in Mar-25

• Bank Indonesia held the BI-Rate at 5.75%, consistent with market expectations, as inflation remains subdued and global uncertainty persists.
• The trade surplus and strong foreign exchange reserves provide resilience, though capital flows remain volatile amid shifting global risk sentiment.
• The central bank maintains a cautious easing bias, with future rate adjustments contingent on inflation trends, Rupiah stability, and global financial market conditions.

Trump-ism And East Asia

• Donald Trump’s abandonment of the US-led international order and efforts to reshape global trade and finance do not bode well for East Asian economies that may find themselves forced by Washington into a Chinese sphere of influence as part of a grand bargain with Beijing.

By Alastair Newton

Indonesia: Policy Rate Held At 5.75% (Consensus 5.75%) in Feb-25

• Bank Indonesia held the BI-Rate at 5.75%, in line with expectations, maintaining a cautious stance as inflation remains within target and global financial uncertainty persists.
• The central bank reinforced macroprudential measures to support credit growth and external stability, including expanding the KLM programme and strengthening foreign exchange policies.
• Future rate decisions will be data-driven, with further easing contingent on inflation stability, Rupiah resilience, and global financial market developments, particularly the trajectory of US monetary policy.