Investing.com -- In an unexpected move, Bank Indonesia (BI) has trimmed its policy rate by 25bps, a strategy aimed at bolstering domestic growth.
Prior to this, BI had underscored its concentration on stability and the absolute level of the Indonesian Rupiah (IDR), leading to worries about the near-term growth outlook.
These concerns, coupled with fears of potentially diminished loan growth potential in 2025, amplified share price corrections from Emerging Market (EM) sell-off amid broader global macroeconomic concerns.
Despite lowering its 2025 Gross Domestic Product (GDP) growth forecast to a range of 4.7-5.5%, down from the previous 4.8-5.6%, BI anticipates that system loan growth will be sustained at 11-13%.
In response to the rate cut, Morgan Stanley (NYSE:MS) analysts commented that "uncertainties remain regarding the global macro outlook and therefore IDR stability."
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