JAKARTA – Several economists have shared mixed expectations regarding Bank Indonesia’s (BI) interest rate policy ahead of the Board of Governors' Meeting (RDG) scheduled for today (19/2).

Rully Wisnubroto, Chief Economist & Head of Research at Mirae Asset Sekuritas Indonesia, stated that market participants are currently awaiting BI's decision. He noted that in January, BI surprised markets by cutting the interest rate to 5.75%, a move beyond consensus expectations.

On the other hand, economists are divided. Some believe BI will maintain the benchmark interest rate, while others see the potential for a 25-basis-point (bps) rate cut.

“There are several economists, including those at Mirae Asset, who predict a 25 bps cut. We believe it is necessary given both global and domestic challenges,” Rully said during today’s Market Commentary presentation.

Rully views the rate cut as essential to support economic growth. However, he also acknowledged that lowering the interest rate could increase rupiah exchange rate volatility.

“We see the urgency of lowering the interest rate to stimulate the economy, and we feel it is more necessary at this time,” Rully explained.

Meanwhile, Lotus Andalan Sekuritas and Phintaco Sekuritas expect BI to maintain the interest rate at 5.75%, as well as the deposit facility rate and lending facility rate at 5.00% and 6.50%, respectively. (KR/ZH)