Bank Indonesia prioritized the IDR’s stability in the October 22 monetary policy meeting. The central bank defied market expectations for a rate cut and kept the policy rate unchanged at 4.75%. USD/IDR subsequently retreated from this month’s pivotal resistance level of 16620 to 16580, closer to the 16500 level assumed in the 2026 State Budget presented to parliament in September. Last week, Finance Minister Purbaya Yudhi Sadewa expected economic growth to rebound to 5.5% and strengthen the IDR in 4Q 2025, adding that he expected growth of 6% in 2Q 2026. However, Indonesia will only release the 3Q 2025 economic report card on November 5.
Interestingly, BI is stressing the need to strengthen monetary policy transmission without endangering macroeconomic stability, aligning with the finance ministry's commitment to raise the efficiency of fiscal spending while maintaining the 3% of GDP debt ceiling. Policymakers are signalling a shift from defensive postures to growth-oriented coordination, suggesting that Jakarta still aims to preserve investor confidence and policy credibility even as it pursues higher medium-term growth.
For now, Indonesia’s policy direction under the Prabowo administration remains pragmatic rather than ideological. Indonesia’s full BRICS membership this year marks diversification, not a detachment from Western-style macro frameworks, but rather a fine-tuning of the dogmatic approach to better balance credibility with flexibility. That said, markets still need convincing. Investors will seek tangible evidence of coherence between fiscal and monetary policies, including sustainable budgets and ceiling caps, and continuing respect for central bank independence, to regain confidence following the abrupt replacement of Sri Mulyani Indrawati as finance minister. Until then, Indonesia’s pragmatic recalibration remains a work in progress in the eyes of the market, with USD/IDR keeping close to 16500
Quote of the Day
“Design is a funny word. Some people think design means how it looks. But of course, if you dig deeper, it's really how it works.”
Steve Jobs
October 23 in history
Apple released the iPod in 2001.
Topic
GENERAL DISCLOSURE/ DISCLAIMER (For Macroeconomics, Currencies, Interest Rates & Digital Assets)
The information herein is published by DBS Bank Ltd and/or DBS Bank (Hong Kong) Limited (each and/or collectively, the “Company”). It is based on information obtained from sources believed to be reliable, but the Company does not make any representation or warranty, express or implied, as to its accuracy, completeness, timeliness or correctness for any particular purpose. Opinions expressed are subject to change without notice. This research is prepared for general circulation. Any recommendation contained herein does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. The information herein is published for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate legal or financial advice. The Company, or any of its related companies or any individuals connected with the group accepts no liability for any direct, special, indirect, consequential, incidental damages or any other loss or damages of any kind arising from any use of the information herein (including any error, omission or misstatement herein, negligent or otherwise) or further communication thereof, even if the Company or any other person has been advised of the possibility thereof. The information herein is not to be construed as an offer or a solicitation of an offer to buy or sell any securities, futures, options or other financial instruments or to provide any investment advice or services. The Company and its associates, their directors, officers and/or employees may have positions or other interests in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking or financial services for these companies. The information herein is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of or located in any locality, state, country, or other jurisdiction (including but not limited to citizens or residents of the United States of America) where such distribution, publication, availability or use would be contrary to law or regulation. The information is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction (including but not limited to the United States of America) where such an offer or solicitation would be contrary to law or regulation.
[#for Distribution in Singapore] This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) which is Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. DBS Bank Ltd may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 65-6878-8888 for matters arising from, or in connection with the report.
DBS Bank Ltd., 12 Marina Boulevard, Marina Bay Financial Centre Tower 3, Singapore 018982. Tel: 65-6878-8888. Company Registration No. 196800306E.
DBS Bank Ltd., Hong Kong Branch, a company incorporated in Singapore with limited liability. 18th Floor, The Center, 99 Queen’s Road Central, Central, Hong Kong SAR.
DBS Bank (Hong Kong) Limited, a company incorporated in Hong Kong with limited liability. 11th Floor, The Center, 99 Queen’s Road Central, Central, Hong Kong SAR.
Virtual currencies are highly speculative digital "virtual commodities", and are not currencies. It is not a financial product approved by the Taiwan Financial Supervisory Commission, and the safeguards of the existing investor protection regime does not apply. The prices of virtual currencies may fluctuate greatly, and the investment risk is high. Before engaging in such transactions, the investor should carefully assess the risks, and seek its own independent advice.