JAKARTA - Trimegah Sekuritas Indonesia economist Fakhrul Fulvian said there was an opportunity or momentum for Bank Indonesia (BI) to lower its benchmark interest rate at the May 2025 meeting.
The reason is that the stable rupiah exchange rate is starting to subside the tension of the trade war at the global level.
"We can see that the exchange rate is stable and tends to strengthen, along with the easing of the trade war," said Fakhrul in Jakarta, quoted by Antara, Monday, May 19.
In addition, he continued, the urgency to increase national economic growth is increasing amid the slowdown in global economic prospects as trade wars continue.
In addition to the interest rate, according to him, what BI needs to pay further attention to is the use of the Rupiah Bank Indonesia Securities (SRBI) after the stability of the rupiah is achieved.
"Market participants hope that liquidity conditions in the money market can improve, if the yield level of SRBI results is decreasing and the amount won is also adjusted," said Fakhrul.
Regarding financial market intermediation, he considered that the easing of macroprudential policies still had to be continued to support credit expectations in the midst of an economy that tended to weaken.
Meanwhile, for the stock market, he said improving global sentiment would make the JCI still be on a positive trajectory during this week, with the BI rate cutting being the main catalyst.
According to him, the shares of the banking sector will become the main sector to support the stock market, along with the increasing number of foreign funds entering Indonesia.
"JCI can reach 7,300, but we have to be careful with profit taking if the sentiment of the trade war returns," said Fakhrul.
Furthermore, he said market participants would also pay attention to the realization of the State Revenue and Expenditure Budget (APBN) in April and May 2025, which will determine the supply of state obligations that will enter the market.
BACA JUGA:
"The large short-term volatility has been completed. What we must pay attention to in the future is the execution of government spending, because this will determine whether in the second semester of 2025 we will experience an economic rebound or still fall in a lower growth zone," said Fakhrul.
This week, BI will hold a meeting of the Board of Governors' Meetings (RDG) on Tuesday, May 20 and Wednesday, May 21. The BI rate is currently at the level of 5.75 percent.
Meanwhile, the rupiah exchange rate at the opening of trading Monday, May 19, morning in Jakarta, weakened by 36 points or 0.22 percent to Rp16,481 per US dollar from the previous Rp16,445 per US dollar.
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