BI Potentially Maintains Interest Rates Amid Global Uncertainty

Bank Indonesia (Photo: VOI)

JAKARTA - Head of Bank Permata Economist Josua Pardede stated that Bank Indonesia (BI) is expected to maintain the BI-rate policy interest rate at the level of 4.75 percent at the Board of Governors' Meeting (RDG) November 2025.

He explained that these estimates were driven by global uncertainty conditions that were still high and continued to create a significant risk environment.

According to him, the market will also remain cautious about the possibility of cutting the Fed's interest rate in December 2025.

"In the future, we are still looking at space for further easing. A 25bps cut in interest rates in December 2025 remains a consideration, although this will depend on domestic inflation data, Rupiah stability, portfolio flow, and Fed policy attitudes related to the future FFR interest rate path.

For 2026, Josua estimates that interest rate cutting rooms will still exist, but are more limited than 2025.

He added that the total easing estimated at around 50 bps, considering that policies that are too pro-growth have the potential to widen the double deficit in the current account deficit (CAD) and the fiscalv deficit so that BI still needs to be careful.

On the external side, Josua added that the impact of inflation from tariffs related to the trade war on the US economy has not been fully realized, suggesting that the Fed is unlikely to pursue an aggressive easing cycle.

"To maintain the difference in positive interest rates, BI's space to cut interest rates will be limited, especially after this year's aggressive easing compared to the Fed," he explained.