DBS Group Research projects that Bank Indonesia (BI) will likely maintain a dovish stance throughout the fourth quarter of 2025, in line with expectations of the Fed's monetary policy easing next month.
For the record, the benchmark interest rate, or BI-Rate, has been lowered five times since September 2024 by 125 basis points (bps), bringing it to its current level of 5 percent. The 25bps BI-Rate cut at the August 2025 Board of Governors Meeting (RDG) marked the second consecutive monthly reduction.
"Several high-frequency activity indicators point to weakening growth momentum in the second half of the year, coupled with a challenging global trade environment, leading Bank Indonesia to maintain its supportive growth policies. This decision comes amid inflation remaining within target and a relatively stable rupiah," said Radhika Rao, Senior Economist at DBS Bank, in a statement.
