Analysts at BMI, a research institution owned by Fitch Solutions, reported that the Bank of Indonesia is expected to keep the policy interest rate unchanged next week and then relax the policy in 2026. These analysts said that controlled inflation provides room for further interest rate cuts to support the government's growth agenda. However, the magnitude and speed of further interest rate cuts may be constrained by the continued weakness of the Indonesian rupiah. Weak export growth and domestic factors are expected to continue to weigh on the Indonesian rupiah, thus limiting the room for further policy relaxation. BMI predicts that the Bank of Indonesia's policy interest rate will drop to 4.25% from the current 4.75% by the end of 2026.

Analysts at BMI, a research institution owned by Fitch Solutions, reported that the Bank of Indonesia is expected to keep the policy interest rate unchanged next week and then relax the policy in 2026. These analysts said that controlled inflation provides room for further interest rate cuts to support the government's growth agenda. However, the magnitude and speed of further interest rate cuts may be constrained by the continued weakness of the Indonesian rupiah. Weak export growth and domestic factors are expected to continue to weigh on the Indonesian rupiah, thus limiting the room for further policy relaxation. BMI predicts that the Bank of Indonesia's policy interest rate will drop to 4.25% from the current 4.75% by the end of 2026.