jakarta, Indonesia - October 22, 2025 – Indonesian shares plunged more than 1% today following Bank Indonesia’s (BI) decision to maintain its benchmark interest rate.The Jakarta Composite Index (JCI) closed down 0.53% at 6,862.39 as of 12:05 PM local time,reversing earlier gains made in anticipation of a potential rate cut.
The unexpected hold comes despite predictions from a majority of analysts adn financial institutions anticipating a reduction.Nine out of thirteen institutions surveyed had forecast a lowering of interest rates, while four projected BI would remain steady. This decision impacts investors, businesses, and consumers across Indonesia, influencing borrowing costs and economic growth expectations. The next BI monetary policy meeting is scheduled for November 19, 2025, where further adjustments will be considered based on evolving economic data.
BI’s decision to hold the rate steady signals a cautious approach amid global economic uncertainties and a relatively stable Indonesian Rupiah. While inflation remains within the central bank’s target range,external pressures and potential risks warrant a conservative monetary policy stance.
Analysts at CNBC Indonesia reported that the market had largely priced in a rate cut, leading to the sharp sell-off following the announcement. The immediate impact is felt across various sectors,especially those sensitive to interest rate fluctuations,such as banking,property,and automotive.
