Indonesia’s stock market has received a breath of fresh air following signs of potential liquidity easing, as the once-heated U.S.-China tariff war begins to ease.
Adrian Joezer, Head of Equity Research at Mandiri Sekuritas, stated that the easing trade tensions between the U.S. and China have helped alleviate investors’ concerns over tight market liquidity.

"The softening of U.S.-China trade tensions and the passing of the dividend distribution season may signal an easing of liquidity concerns that had been weighing on the stock market," Adrian said.

He also noted that there is now greater room for Bank Indonesia to adopt a more accommodative monetary policy, including the potential for a benchmark interest rate cut.

"From the monetary policy side, there's more flexibility to pursue a dovish stance going forward, including possible rate cuts," Adrian explained.

The combination of a de-escalating tariff situation and the possibility of looser monetary policy has triggered a return of foreign capital to the domestic market. Inflows into the stock market have begun to show positive signs in recent weeks.

"We’ve observed fairly resilient performance over the past one to two weeks, with foreign funds flowing back into Indonesian equities," he added.

Amid global economic turmoil, the rupiah’s recent stability provides Bank Indonesia with a strong opportunity to lower interest rates this month, according to Fakhrul Fulvian, Chief Economist at Trimegah Sekuritas Indonesia.

He pointed out that BI had already hinted at this in its April 2025 monthly statement. At that time, BI Governor Perry Warjiyo said: “Looking ahead, Bank Indonesia continues to monitor the space for further reductions in the BI Rate, considering rupiah exchange rate stability, inflation prospects, and the need to support economic growth.”

Fakhrul added, "This statement implies that the rupiah has stabilized and is even strengthening in line with easing trade tensions. Meanwhile, the urgency to boost economic growth is increasing as global prospects weaken due to the trade war."

In addition to interest rates, Fakhrul emphasized that Bank Indonesia also needs to reassess the use of SRBI (Bank Indonesia’s Rupiah Securities) now that the rupiah is stable.

“The market expects better liquidity in the money market if SRBI yields are lowered and the volume of winning bids is adjusted accordingly,” he continued.

On financial market intermediation, Fakhrul believes macroprudential policy easing should continue to support credit expectations amid a slowing economy. He added that with improving global sentiment, the Jakarta Composite Index (JCI) should remain on a positive trajectory this week, with a potential BI rate cut acting as a key catalyst.

The banking sector is expected to be the main driver of the stock market, supported by increasing foreign fund inflows. Fakhrul projects that the JCI could reach 7,300, although he cautions investors to be aware of profit-taking should trade war fears resurface.

Looking ahead, Fakhrul highlighted that the next critical economic factor for the market will be the realization of the state budget (APBN) in April and May, which will influence the supply of government bonds to the market. He noted that the recent wave of short-term volatility appears to have passed.

“What we need to watch going forward is how government spending is executed. This will determine whether the second half of 2025 will see an economic rebound or if we’ll remain stuck in a low-growth zone,” he concluded.