Indonesian Macro Update - BI Rate Update 20 Nov 2025
KBVS MACRO UPDATE
Thursday, 20 November 2025
Bank Indonesia Prioritizes Stability Amidst Global Volatility
As widely anticipated, Bank Indonesia (BI) opted to maintain its benchmark policy rate (Cons: 4.75%, KBVS: 4.75%, Prev: 4.75%) alongside the Deposit Facility (3.75%) and Lending Facility (5.50%). We see that with the steady rate, the Indonesia market remains attractive, with the 12-month Interbank Money Market (JIBOR) remaining stable at 5.65% to 5.85%, ensuring liquidity remains ample. Furthermore, portfolio yields in Indonesia remain compelling, with the 10-year SUN yield currently ranging between 6.00% – 6.20%.
Several key considerations shaped this decision. First, intensified external pressure on the Rupiah. Second, potential inflationary pressures. Third, the transmission of previous monetary easing to the banking sector remains sluggish. Fourth, rising concerns over Indonesia’s external balance.
Looking ahead, in the short term, Rupiah assets remain attractive, supporting currency stability. We maintain our expectation for a potential 25 bps cut in both the Fed Funds Rate and the BI rate by year-end.
Regards,
KBVS Research Team