According to Jinshi data reports, economists at HSBC Global Research predict that after a 25 basis point rate cut by the Bank of Indonesia on Wednesday, further rate 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, followed by a 50 basis point cut in the fourth quarter, and another 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.