BI Rate Is Predicted To Be Cut To 5.5 Percent
JAKARTA - PT Bank Mandiri (Persero) Tbk estimates that Bank Indonesia will lower the benchmark interest rate or BI Rate at the BI Board of Governors' Meeting (RDG) in May 2025.
Bank Mandiri's Chief Economist, Andry Asmoro, assessed that currently there is room for Bank Indonesia to cut the BI Rate from the current level of 5.75 percent to 5.5 percent.
In fact, according to him, market consensus even estimates a decline in the BI Rate by 5.25 percent.
"We see, maybe the fastest, yes, if the rupiah is relatively stable, there is room then cutting the 25-base benchmark interest rate at RDG this month. So 25 bases from 5.75 percent to 5.5 percent," said Andry in Mandiri Economic Outlook Q2 2025 entitled Building Resilience in the Midst of Global Turbulence, Monday, May 19.
He considered that the momentum to lower interest rates at this time was quite appropriate because of several factors, namely first, to encourage and support Indonesia's economic growth.
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Then, the second factor is that the pressure on the rupiah exchange rate has started to subside compared to the initial period of the year or the first quarter.
Furthermore, the third factor is that the inflation rate is estimated to remain low and still within the target range of Bank Indonesia.
"And last but not least, I think then we range from interest rate, benchmark rate compared to other countries is also still relatively competitive," he said.