A strong majority of economists, 24 of 26 surveyed between March 9 and 12, forecast the central bank would keep its benchmark seven-day reverse repurchase rate unchanged at 4.75%. The overnight deposit and lending facility rates are also expected to remain steady at 3.75% and 5.50%, respectively.

The Indonesian central bank has maintained its policy stance since October, prioritising currency stability as the rupiah weakened amid global uncertainty. Renewed geopolitical tensions following the U.S.-Israeli war on Iran have intensified pressure on emerging-market currencies, including Indonesia’s.

The rupiah fell to a record low earlier this week and has declined more than 1% so far this year after losing about 4% in 2025, effectively closing the window for an immediate rate cut.

Bank Indonesia has previously signalled its willingness to support economic growth but has refrained from easing policy as currency volatility remains a central concern. Maintaining exchange-rate stability is a key element of the bank’s mandate.

“The central bank will hold as it can’t resume its accommodative stance given how much the rupiah has weakened over the past month, especially in the last couple of weeks after the U.S.-Iran conflict,” said Tay Qi Hang, economist at the Economist Intelligence Unit.

Investor sentiment has also been weighed down by concerns over fiscal credibility linked to the spending plans of Indonesian President Prabowo Subianto, which economists say could widen budget deficits.

Questions surrounding central bank independence after the appointment of the president’s nephew as a deputy governor have further unsettled markets, contributing to capital outflows.

The latest poll reflects a shift from an earlier Reuters survey in which about 85% of economists had anticipated rate cuts beginning in the second quarter.

Hang said February’s higher inflation reading alone was unlikely to determine the central bank’s decision but that currency weakness would delay any easing cycle.

“The timing of its next rate cut will likely be delayed until June at the earliest, as rupiah weakness constrains both the willingness and ability of the central bank to ease earlier,” he said.

The Philippines, which holds the rotating ASEAN chairmanship this year, is hosting an economic ministers’ retreat while foreign ministers are scheduled to convene virtually on the same day to discuss the widening crisis and its implications for Southeast Asia.

Philippine Trade Undersecretary Allan Gepty said the conflict’s economic impact would feature prominently in discussions, particularly as energy prices and logistics disruptions ripple through regional economies.“The concern is a given,” Gepty told reporters, noting that ASEAN governments could not ignore the potential effects on inflation, employment and supply chains.

Joint strikes by the United States and Israel on Iran launched nearly two weeks ago have killed around 2,000 people and disrupted global energy markets and transportation routes, according to officials cited in the discussions.

The conflict has effectively closed the Strait of Hormuz, a strategic maritime chokepoint through which roughly a fifth of the world’s oil and liquefied natural gas shipments pass, sending crude prices above $100 per barrel and triggering volatility in global markets.

Several Southeast Asian economies depend heavily on crude oil and LNG imports from the Gulf, raising concerns over fuel costs and energy security if disruptions persist.

The Philippines imports a significant portion of its oil from the Middle East, while a halt in liquefied natural gas exports from QatarEnergy has tightened regional supply conditions.

Authorities in Manila have shortened the government work week to conserve fuel, and President Ferdinand Marcos Jr. has asked Congress for authority to suspend fuel excise taxes to cushion rising costs.

Elsewhere in the region, Vietnam cut retail fuel prices overnight after a recent easing in global crude benchmarks but warned volatility could persist amid ongoing supply disruptions.

Earlier this month, Thailand halted energy exports to all countries except Laos and Myanmar in an effort to safeguard domestic supply.

ASEAN foreign ministers have described the escalation of the conflict as “particularly regrettable” and called for an immediate cessation of hostilities, urging all sides to exercise restraint, protect civilians and resolve differences through dialogue in accordance with international law.

Regional officials say coordinated policy responses will be essential to manage the economic shock if disruptions to energy supplies and trade routes continue.

“It is important that our actions and responses to the ongoing conflicts must be synchronised,” Gepty said.