Following a two-day meeting of its board of governors, held on July 15–16, 2025, Bank Indonesia announced here that the benchmark BI-Rate has been cut to 5.25 percent.
Meanwhile, the deposit facility rate has been reduced to 4.5 percent and the lending facility rate to 6.0 percent.
“The decision is consistent with our forecast that inflation in 2025 and 2026 will remain within our target of 2.5 percent plus or minus one percent,” BI Governor Perry Warjiyo said.
He added that the move also reflects the stability of the rupiah exchange rate, which is in line with its fundamentals, and the need to continue driving economic expansion.
“Going forward, Bank Indonesia will continue to assess room for further rate cuts to support economic growth while maintaining rupiah stability and ensuring inflation remains on target, in line with global and domestic economic dynamics,” Warjiyo informed.
Alongside monetary easing, the central bank is implementing accommodative macroprudential policies for stimulating lending, lowering borrowing costs, and enhancing banking system liquidity.
It is also promoting greater use of digital payments and strengthening the payment system infrastructure.
To stabilize the rupiah, BI has intensified currency interventions, including spot market operations, domestic non-deliverable forwards, and foreign non-deliverable forwards.
The central bank is also buying government bonds in the secondary market to support financial market stability.
Other measures include pro-market monetary operations designed to improve the transmission of lower policy rates, sustain ample liquidity, deepen money and foreign exchange markets, and attract foreign portfolio inflows.
The central bank has adjusted the structure of monetary instruments and currency swaps to attract foreign investment into domestic monetary assets.
Additionally, it is bolstering transparency by publishing assessments of banks’ lending rate structures, expanding digital payment acceptance, and strengthening international cooperation in central banking.
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Reporter: Rizka Khaerunnisa, Uyu Liman
Editor: Azis Kurmala
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