Jakarta – Bank Indonesia (BI) decided to reduce the benchmark interest rate or BI Rate by 25 basis points (bps) to 5.25 percent. Likewise, the Deposit Facility interest rate and the Lending Facility interest rate were cut by 25 bps to 4.5 percent and 6 percent respectively in July 2025.
“The Bank Indonesia Board of Governors Meeting on July 15 and 16, 2025 decided to reduce the BI Rate by 25 bps to 5.25 percent,” said Perry Warjiyo, Governor of BI at the July 2025 Board of Governors Meeting (RDG) on Wednesday, July 16, 2025.
Perry said that this decision is consistent with the lower inflation forecast for 2025 and 2026 within the target range of 2.5±1 percent. In addition, the stability of the rupiah exchange rate in accordance with fundamentals, as well as the need to continue to encourage economic growth, are considerations for lowering interest rates.
“Going forward, BI will continue to look at the room for interest rate cuts to encourage economic growth while maintaining the stability of the rupiah exchange rate and achieving inflation targets in accordance with the dynamics that occur in the global and domestic economy,” he said.
Perry also said that accommodative macroprudential policies continue to be optimized with various strategies to increase credit financing, lower interest rates, and flexibility in bank liquidity management to encourage sustainable economic growth.
Payment system policies are also directed to support economic growth. Steps are taken through the expansion of digital payment acceptance, strengthening infrastructure and consolidating the payment system industry structure.
“BI continues to strengthen the mix of monetary, macroprudential and payment system policies to maintain stability in order to strengthen sustainable economic growth,” he concluded. (*)
Editor: Galih Pratama
