REPUBLIKA.CO.ID, JAKARTA -- Bank Mandiri Chief Economist, Andry Asmoro, predicts Bank Indonesia (BI) will cut its benchmark interest rate (BI) by 25 basis points to 5.5 percent at the May 2025 Board of Governors Meeting. This prediction goes along with the stabilization of the rupiah exchange rate and the easing of global tensions.

“If indeed the rupiah is relatively stable, we see room to cut the benchmark interest rate by 25 basis points in the DRC this month, from 5.75 percent to 5.5 percent,” Andry said in Bank Mandiri's Second Quarter 2025 Economic Outlook Press Conference on Monday (19/5/2025).

He mentioned that the market consensus expects BI Rate to be at 5.25 percent. According to him, the current global economic conditions are quite conducive to providing monetary policy easing.

External factors in favor include the easing of the U.S.-China trade war and the achievement of an armistice agreement between India and Pakistan. This situation is considered to provide a positive sentiment for the strengthening of the rupiah. “The momentum I think is right. First, to prop up national economic growth. Secondly, the pressure on the rupiah was not as great at the beginning of the first quarter of last year,” Andry explained.

He added that inflation is still within BI's target range of 2.5±1 percent. Based on Bank Mandiri's macroeconomic analysis, 2025 inflation is expected to be 2.38 percent. “Lastly, our interest rate range compared to other countries is also still relatively competitive,” he said.

Ikuti Whatsapp Channel Republika