MNI BI Preview-Oct 2025: More Cuts To Support Growth

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EXECUTIVE SUMMARY:

• Bank Indonesia stated in September that its decision to cut rates was "consistent with joint efforts to stimulate economic growth", so another 25bp rate cut to 4.5% on 22 October is expected as activity data have softened over the last month.
• Other factors supporting further monetary easing include USDIDR stabilising below 16600 in October, IDR NEER is higher since the September decision, BI’s pro-growth stance, and Fed cuts expected in October and December.
• Also headline and core CPI inflation remain well contained within BI's 1.5-3.5% target band and it expects it to stay there in 2026. However, upside inflation risks could develop given coordinated easing of fiscal and monetary policies.