The Cut In Reference Interest Rates Will Make The Indonesian Stock Market Strengthen Sustainable

JAKARTA - Fixed Income & Macro Strategic Mega Capital Indonesia Lionel Priyadi said that the Indonesian stock market will move higher in a sustainable manner (Rally) as Bank Indonesia (BI) decides to lower its benchmark interest rate.

Along with the decline in BI's benchmark interest rate, he recommended collecting shares in the property, banking, automotive and technology sectors in the Indonesian stock market.

"The Indonesian stock market will rally with recommendations on property, banks, automotive and technology," said Lionel, quoted by Antara in Jakarta, Thursday, January 16.

Regarding global benchmark interest rates, he projects that the United States (US) Federal Reserve (The Fed) central bank will quickly reduce its benchmark interest rate in March 2025.

"The Fed will only cut again as early as March (2025)," said Lionel.

In the January 2025 Board of Governors Meeting (RDG) on Tuesday January 14 and Wednesday January 15, BI decided to reduce BI-Rate by 25 basis points (bps) to a level of 5.75 percent.

The deposit facility interest rate fell 25 bps to a level of 5 percent. Meanwhile, the lending facility interest rate was also decided to drop by 25 bps to a level of 6.5 percent.

BI Governor Perry Warjiyo said the decline in BI-Rate was to encourage growth in terms of domestic demand. "This is the timing to lower interest rates, so that they can create better growth stories," Perry said.

Meanwhile, the Fed is scheduled to hold a The Federal Open Market Committee (FOMC) meeting on January 28- 29, 2025.