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18 Sep 2025

International Economy

BI further cuts the interest rate to 4.75%, signaling a policy mix aimed at accelerating economic recovery (Business Brief No.4194 Full Ed.)

คะแนนเฉลี่ย
  • Bank Indonesia (BI) continues to cut the interest rate to support the economy. It recently reduced the policy rate to 4.75 percent, marking the sixth cut with a cumulative reduction of 1.5 percent since September 2024. The move reflects its focus on accelerating economic recovery in alignment with fiscal policy direction. 
  • The monetary-fiscal policy mix is clearly advancing in tandem, with the government injecting IDR 200 trillion in liquidity and launching an IDR 16.23 trillion stimulus in September 2025. Meanwhile, BI is mandated to participate in “burden-sharing” to shoulder the debts of government programs, reinforcing the policy mix to stimulate the economy. 
  • KResearch views that BI is likely to continue cutting interest rates, given that inflation remains within the target range and the Fed’s interest rate reductions have helped alleviate pressure on the Indonesian Rupiah. However, achieving the 6-8 percent GDP growth target remains challenging amid fiscal risks and financial stability concerns that continue to be key issues for the economy.

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International Economy