IHSG Opens Stronger After BI, The Fed Cut Interest Rates

September 18, 2025 | 12:43 pm

TEMPO.CO, Jakarta - The Indonesia Composite Index (IHSG) on the Indonesia Stock Exchange (IDX) opened stronger on Thursday, September 18, 2025, in line with loose monetary policies by central banks, both within and outside the country.

IHSG opened at 40.56 points, or 0.51 percent higher, at 8,065.74. Meanwhile, the LG45 index gained 5.29 points or 0.65 percent to 820.51.

"We estimate IHSG to continue climbing and test the level of 8,150," said Chief Researcher of Phintraco Sekuritas, Ratna Lim, in her analysis in Jakarta on Thursday.

From within the country, the September 2025 Bank Indonesia (BI) Board of Governors Meeting decided to cut the benchmark interest rate (BI-Rate) by 25 basis points (bps), bringing it to 4.75 percent.

As of September 2025, BI has cut the benchmark interest rate by 125 bps throughout this year to reach the lowest level since October 2022. The decrease in interest rates is in line with BI's inflation prediction within the targeted range, a stable rupiah, and efforts to boost economic growth.

BI reported that August 2025 credit growth reached 7.56 percent year-on-year (yoy) from 7.03 percent yoy in July 2025, marking the first increase after experiencing a slowdown for five consecutive months.

In the Asian region, market participants will look at the August 2025 inflation data of Japan, which is expected to lower to 2.8 percent (yoy) from the previous 3.1 percent (yoy) in July 2025.

From the European region, the Bank of England (BoE) is expected to maintain the benchmark interest rate at 4 percent, after lowering the interest rate by 25 bps from 4.25 percent the previous month, the lowest level since March 2023.

The United States central bank, The Fed, has finally cut the interest rate by 25 bps to 4-4.25 percent, marking the first drop in 2025. The Fed indicated that it will lower the interest rate twice more this year.

On the other hand, The Fed Chair Jerome Powell slightly subdued the enthusiasm by indicating that this move is not the start of a long interest rate cut cycle.

The Fed stated that economic activity is slowing, with a slowdown in job growth, and inflation has increased and remained somewhat high.

The lower job growth and higher inflation contradict The Fed's dual objectives of stable prices and full employment.

Furthermore, The Fed stated that uncertainty about the economic outlook remains high. The Fed also indicated that it will reduce the interest rate once in 2026, which is below the current market forecast of three times.

On Wednesday, September 17, 2025, European stock exchanges closed varied. Among them, the Euro Stoxx 50 was recorded unchanged, the FTSE 100 index of the UK strengthened by 0.14 percent, the DAX index of Germany strengthened by 0.13 percent, and the CAC index of France weakened by 0.40 percent.

The US stock exchange on Wall Street also closed varied on Wednesday.

Among them, the S&P 500 index fell 0.1 percent to 6,600.35 and the Nasdaq weakened 0.3 percent to 22,261.33, while the Dow Jones rose 0.6 percent to 46,018.32.

Meanwhile, this morning in the regional Asian stock exchanges, the Nikkei index strengthened by 439.12 points, or 0.99 percent, to 45,232.00; the Shanghai index strengthened by 10.76 points or 0.28 percent, to 3,887.78; the Hang Seng index strengthened by 65.61 points or 0.20 percent, to 25,971.50; and the Strait Times index weakened by 1.41 points or 0.03 percent, to 4,321.78.

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