JAKARTA - Bank Permata Chief Economist Josua Pardede assessed that Bank Indonesia has the potential to maintain the BI Rate at the level of 4.75 percent in the April 2026 Governor's Board Meeting (RDG).
According to him, the current monetary policy direction still focuses on efforts to maintain the stability of the rupiah exchange rate, not on monetary easing.
"BI is expected to hold interest rates again in April and as long as external pressures have not eased, it will be difficult for BI to cut interest rates," he said in a statement, Tuesday, April 21.
He added that although the global market conditions at the beginning of the week looked relatively stable and the main stock exchanges held up, the situation was not strong enough to change the BI policy stance.
Josua said the first factor behind this decision came from the external side, namely the market was still looking at the uncertain prospects for peace, with high risks, and in the midst of this situation, BI must still prioritize rupiah stability.
"This is important because even after optimism about negotiations and an extension of the ceasefire emerged, the dollar and oil prices did weaken, but they are still fragile and very dependent on daily news," he explained.
He added that as of April 16, 2026, the exchange rate of the rupiah against the US dollar was in the range of Rp. 17,127, showing pressure on the dollar, but geopolitical developments and global policy directions can still quickly change market sentiment.
"So, from BI's point of view, cutting interest rates in the midst of uncertainty like this will be too risky because it can weaken the cushion for the rupiah at a time when the market is not really stable," he said.
He added that the second reason was related to energy inflation, namely the increase in energy prices, including non-subsidized fuels, was indeed one of BI's considerations for holding interest rates, although it was not the main factor.
According to him, the direct impact on April inflation is relatively limited because the increase only occurred in certain segments with a small portion.
However, BI also takes into account the subsequent effects, such as on inflation expectations, logistics costs, production costs, and import inflation if the rupiah remains depressed.
Josua said that assuming the average oil price reaches 80 US dollars and the exchange rate is close to Rp17,000 per US dollar, the room for BI Rate reduction in 2026 is expected to be narrower.
"So, the increase in non-subsidized fuel itself does not automatically force BI to raise interest rates, but it is clear that it makes it more difficult for BI to cut it now," he said.
The third factor is the domestic conditions which are not yet weak enough to encourage immediate easing, namely core inflation in March 2026 was recorded as declining, while the consumer confidence index remained strong at 122.9, and retail sales still grew and the manufacturing PMI was in the expansion zone even though it slowed to 50.1.
According to him, this shows that the domestic economy is still in a moderate phase and does not need interest rate stimulus in the near future.
He added that with the still good consumption resilience, BI has room to continue to prioritize exchange rate stability, while utilizing other policy instruments to support growth.
Josua added that in the future, the possibility of a reduction in the BI Rate is expected to be narrower or delayed and BI may need to maintain interest rates at the current level for a longer period of time in order to maintain rupiah stability.
According to him, as long as the pressure from energy prices, geopolitical risks, exchange rate weakening, the potential for widening the current account deficit, and the high risk premium for Indonesia still persists, a stable interest rate policy is important to maintain the attractiveness of rupiah assets.
"The current interest rate also helps maintain the yield gap with other countries, holding back capital outflows, and anchoring inflation expectations," he explained.
Josua said the main scenario in this RDG is that BI will again maintain interest rates and new opportunities for reduction will open if a number of conditions are met simultaneously.
He gave examples such as easing geopolitical tensions in the Middle East, stable oil price declines, consistent strengthening of the rupiah, more stable foreign capital flows, and clarity on the direction of global interest rate policies.
According to him, as long as these factors have not materialized, BI is expected to keep interest rates at the current level.
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