TheJakartaPost
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Bank Indonesia (BI) cut its benchmark interest rate for the fifth time this year, lowering it to 4.75 percent just a day before the United States Federal Reserve (the Fed) announcement. The move reflected BI’s bet that the US monetary authority would also ease its policy. A day later, the Fed indeed cut the federal funds rate (FFR) for the first time in 2025. Both central banks’ decisions were driven by concerns over slowing economic growth but also sparking debate on government influence in central bank decisions.
Bank Indonesia (BI) and the Finance Ministry have announced another burden-sharing arrangement through Indonesian government securities (SBN), a mechanism typically reserved for easing the government’s fiscal burden during crises, even though no national crisis has been declared. Part of the proceeds will finance priority programs, continuing the central bank’s financial backing of government initiatives. Economists warn, however, that the policy risks undermining economic stability and BI’s independence.
Bank Indonesia's rate cut this week stunned markets for all the wrong reasons - investors fear the central bank is bowing to pressure from President Prabowo Subianto to juice the economy, compromising its independence and risking a rupiah sell-off.
Bank Indonesia reveals that Rp 2,372.1 trillion in approved bank loans remains unused as of August, warning that sluggish credit expansion, with just 7.56 percent year-on-year growth, could weigh on GDP growth.
With a digital penetration rate of approximately 80 percent in Southeast Asia, countries in the region have prioritized digital transformation when it comes to national development. The ASEAN region is a potential market for digital payment innovation, in particular the increase use of the QR (Quick Response) payments since it was first introduced in each country.
