According to Jinshi Data, analysts at Maybank said that the Indonesian central bank is likely to keep interest rates unchanged in the near term, despite low inflation and the Federal Reserve's expected easing of policy, providing room for rate cuts.
Analysts reiterated their inflation forecast of 2.6% for 2025, within Bank Indonesia's target range of 1.5% to 3.5%. Government subsidies helped contain price pressures, and a wide range of exemptions limited the impact of a value-added tax increase on inflation.
Maybank expects Bank Indonesia and the Federal Reserve to cut interest rates by 75 basis points in 2025, but Bank Indonesia will delay the cut due to financial market volatility and a weak rupiah.