Bank Indonesia plans interest rate hold for stability

Bank Indonesia is expected to keep interest rates steady at 5.75% on March 19 to stabilize the rupiah amid global trade tensions. This decision comes as the economy grew just over 5% in 2024, the slowest pace in three years. Despite the current rate hold, a Reuters poll predicts a potential 25 basis point cut to 5.50% in the second quarter to support economic growth. However, there is uncertainty among economists regarding the timing of any cuts. The central bank faces challenges from a weakening rupiah and global economic uncertainties, particularly related to U.S. trade policies. These factors may influence capital flows and the stability of the currency.