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20 Aug 2025

International Economy

BI unexpectedly cuts its policy rate to 5.0% to brace for the sluggish economy (Business Brief No.4187 Full Ed.)

คะแนนเฉลี่ย
  • Bank Indonesia (BI) lowered its policy rate by 0.25 percent to 5.00 percent — its second consecutive cut, defying market expectations. The move reflects concerns over the domestic economic slowdown amid global economic uncertainty. 
  •  Looking ahead, monetary policy is expected to ease further due to persistent economic pressures. While inflation stays within the target range and the Rupiah has strengthened, monetary policy transmission remains limited, notably evidenced in weak loan demand. BI will thus continue to prioritize monetary stimulus to support consumption and investment. 
  •  KResearch views that BI is likely to cut its policy rate at least once more at the four meetings left in 2025 to address economic risks, provided that inflation and the Rupiah’s stability remain manageable.

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International Economy