BI Cuts Interest Rates 25 Bps, JCI Soars Above Level 7,000

The Composite Stock Price Index (JCI) jumped more than 1% in the trading session Wednesday (15/1/2025), following the surprise decision by Bank Indonesia (BI) to cut its benchmark interest rate by 25 basis points (bps). As of 14:42 WIB, the JCI was recorded as having risen 1% to 7,025.92, re-breaking the psychological level of 7,000 which had been eroded.

This spike occurred after the JCI was previously under pressure until it closed below the 6,900 level. The transaction value in session II today reached IDR 6.6 trillion with trading volume reaching 14 billion shares from 1.1 million transactions.

BI's decision to reduce the BI rate to 5.75% was announced at the Board of Governors Meeting (RDG) which took place January 14-15 2025. This step surprised the market, considering that the previous interest rate had remained stable for the last four months.

"The Bank Indonesia Board of Governors meeting decided to lower the BI-Rate by 25 bps to 5.75%," said BI Governor, Perry Warjiyo, in a press conference today. BI also set the Deposit Facility interest rate at 5% and Lending Facility at 6.5%.

This interest rate cut policy aims to strengthen domestic economic recovery amidst global pressure. As a result, the stock market responded positively, showing investor confidence in a more stable economic outlook. The JCI which managed to return above the 7,000 level is a signal of new optimism for market players.