Jakarta. Bank Indonesia is widely expected to keep its benchmark interest rate unchanged at 4.75% this week, as policymakers prioritize rupiah stability over growth support amid persistent global market volatility.

The decision is anticipated at the central bank’s April 21–22 rate-setting meeting, with economists warning that premature monetary easing could trigger renewed pressure on the currency.

Permata Bank Chief Economist Josua Pardede said the room for rate cuts remains extremely limited as external risks continue to dominate.

“BI is expected to hold rates again in April. As long as external pressures have not eased, it will be difficult for BI to cut interest rates,” Josua said on Tuesday.

He noted that while major global equity markets have shown relative resilience, broader conditions remain fragile. Movements in the US dollar and global oil prices are still highly sensitive to geopolitical tensions and uncertain ceasefire prospects, leaving market sentiment prone to sharp swings.

In such an environment, a rate cut would carry significant risks by weakening the rupiah’s role as a key economic buffer.

Beyond external factors, BI is also monitoring potential inflationary pressures from the energy sector, particularly rising non-subsidized fuel prices. Although the direct impact on April inflation is expected to be limited, authorities remain cautious about second-round effects on logistics costs, production expenses, and inflation expectations.

“An increase in non-subsidized fuel prices does not automatically force BI to raise rates, but it clearly makes it more difficult for BI to cut them at this point,” he added.

Bank Permata also warned that the window for rate cuts in 2026 could fully close if global oil prices average $80 per barrel and the rupiah weakens toward Rp 17,000 per US dollar.

On the domestic front, Indonesia’s economy continues to show resilience. Core inflation eased in March 2026, while the consumer confidence index remained solid at 122.9. Manufacturing activity also stayed in expansion territory, with the Purchasing Managers’ Index (PMI) at 50.1.

“This indicates that while the domestic economy is moderating, it has not reached a point where BI must rush to cut rates to support growth,” Josua said.

With consumption still holding up, BI is expected to rely more on macroprudential policy tools to sustain economic momentum rather than adjusting its benchmark rate.