HSBC Predicts Multiple BI Rate Cuts in 2026

Strategic Monetary Easing Forecast

HSBC's Managing Director and ASEAN Economist, Pranjul Bhandari, has predicted that Bank Indonesia will implement three separate interest rate cuts throughout 2026, totaling 75 basis points. The forecast suggests that BI will maintain an accommodative monetary policy stance while carefully monitoring currency stability.

Opportunistic Rate Cut Strategy

The predicted rate cuts are expected to be opportunistic, with BI waiting for favorable conditions such as a weaker USD before making moves. Bhandari suggests that the central bank will be cautious in its approach to avoid negatively impacting exchange rate stability. Each rate cut is anticipated to be 25 basis points.

Timing and Market Implications

The predicted timeline for the rate cuts includes one reduction in each of Q1, Q2, and Q3 2026. This gradual approach is expected to support economic growth while maintaining financial stability. The market is likely to watch closely for these developments as they could significantly impact Indonesia's economic trajectory.