Overview

• The 25-basis-point move takes the 7-day reverse repo to 5.00%, marking the fifth cut since September and the first back-to-back reduction of this cycle for a total of 125 basis points.
• The decision surprised markets, with only five of 29 economists in a Reuters poll anticipating a cut.
• Governor Perry Warjiyo said the central bank will continue to assess room for additional reductions.
• Bank Indonesia lifted its 2025 GDP projection to around 5.1% or higher after second-quarter growth reached 5.12%, the fastest pace in two years.
• Policymakers pointed to contained inflation and rupiah stability, while slowing loan growth and new 19% U.S. tariffs were flagged as near-term risks.