Mandiri Economist Predicts Bank Indonesia Will Cut Interest Rates Twice This Year

Chief Economist of Bank Mandiri, Andry Asmoro, predicts that the room for Bank Indonesia (BI) to lower its benchmark interest rate, or BI Rate, this year is quite limited. He projects that BI may cut interest rates a maximum of two times in 2026.

As is known, BI’s latest decision was to maintain the BI Rate at 4.75% with a deposit facility rate of 3.75% and a lending facility rate of 5.5% in February 2026.

“According to our projections, Bank Indonesia may only cut the BI Rate a maximum of two times,” he said at a joint breaking-of-the-fast event held by Bank Mandiri in Jakarta on Wednesday (February 25, 2026).

Andry said that this policy is highly dependent on the global economic situation, which is not expected to change much. According to him, global geopolitical tensions have not eased, especially from the United States.

“We see how the geopolitical situation in the United States with Iran, Venezuela and various other countries considered enemies by Donald Trump is. And if you ask how long this situation will last, I don’t think it will ease,” said Andry.

He added that this year will see the continuation of geopolitical drama in the United States with the general election to be held in the country, and the competition between the United States and China continues.

“We see that the competition between the United States and China will continue. The United States still feels behind China in terms of technology and mineral resources,” he said.

This phenomenon, according to Asmo, is causing a slowdown in the global economy this year. The economy, which is expected to be sluggish, will also affect the direction of the US central bank, The Fed, in setting its benchmark interest rate.

“If we look at the direction of the FFR (Fed Fund Rate) itself, according to its guidance, it is expected to be cut once,” he said.

This is different from previous years, when central banks in several countries tended to be more aggressive in setting interest rates.

“This year, we see the possibility that The Fed will only cut interest rates once. Based on its guidance, although the market predicts that The Fed will cut interest rates twice, the guidance is only once,” said Andry.