Bank Indonesia Decides Pangkas Interest Rate To Be 5.00 Percent

Governor of Bank Indonesia Perry Warjiyo (Photo: ANTARA)

JAKARTA - Bank Indonesia (BI) decided to lower the benchmark interest rate or BI-Rate by 25 bps to 5.00 percent.

In addition, BI also lowered the deposit facility interest rate and lending facility rate by 25 bps, bringing it to 4.25 percent and 5.75 percent, respectively.

BI Governor Perry Warjiyo said BI decided to lower the benchmark interest rate at the level of 5.00 percent.

"The Meeting of the Board of Governors (RDG) of Bank Indonesia on August 19 and 20, 2025 decided to reduce the BI-Rate by 25 bps to 5.00 percent," Perry said at a press conference, Wednesday, August 20.

According to Perry, this decision is consistent with the low inflation forecasts for 2025 and 2026 in the target of 2.5 percent plus minus 1 percent.

In addition, he conveyed and maintained the stability of the Rupiah exchange rate and the need to encourage economic growth in accordance with economic capacity.

In the future, Perry said that Bank Indonesia will continue to pay close attention to the space for lower interest rates to encourage higher economic growth in line with the low inflation estimates while maintaining the stability of the Rupiah exchange rate.

Meanwhile, Perry said that the loose macroprudential policy was continuously strengthened to encourage credit/financing, lower interest rates, and increase banking liquidity for higher growth achievement.

"The payment system policy is also directed to help support economic growth through the expansion of the acceptance of digital payments, strengthening the industrial structure of payment systems and strengthening the resilience of payment system infrastructure," he said.

According to Perry, the direction of the mix of monetary, macroprudential, and payment systems is to maintain stability and encourage sustainable economic growth.