According to data from Jinshi, economists at HSBC Global Research predict that after a 25 basis point rate cut by Bank Indonesia on Wednesday, further cuts of 100 basis points may occur in the coming quarters.
A rate cut of 25 basis points is expected in the third quarter of 2025, 50 basis points in the fourth quarter, and 25 basis points in the first quarter of 2026, bringing the policy rate to 4.50%.
The combination of growth and inflation in Indonesia supports further rate easing, as fiscal measures may not address all growth issues. The Indian central bank may need to give the Indonesian rupiah more flexibility to support economic growth.