Bank Indonesia (BI) has decided to keep its benchmark 7-day reverse repurchase rate at 5.75 percent, in line with market expectations. The central bank also maintained the overnight deposit facility rate at 5.00 percent and the lending facility rate at 6.50 percent. This decision comes as the country faces financial market fluctuations, including a decline in the Jakarta Composite Index and a weakening rupiah.
Governor Perry Warjiyo emphasized that keeping rates unchanged will help maintain inflation within the target range of 2.5 percent plus or minus 1 percent for 2025 and 2026. He also highlighted the importance of stabilizing the rupiah amid global economic uncertainty.
Recent turbulence in Indonesia’s financial markets has raised investor concerns. The Jakarta Composite Index saw a significant drop, leading to a temporary trading halt. Meanwhile, the rupiah has weakened against the US dollar, reflecting market worries about fiscal policies and external economic pressures.
Despite these challenges, Finance Minister Sri Mulyani Indrawati reassured that Indonesia’s economic fundamentals remain strong. She pointed out that the projected budget deficit for 2025 stands at 2.53 percent of GDP, well within the legal limit of 3 percent. This fiscal stability is expected to support investor confidence and economic growth.
Bank Indonesia forecasts that the national economy will grow between 4.7 and 5.5 percent in 2025. The central bank will continue monitoring inflation and currency movements to assess potential rate adjustments in the future.
By holding interest rates steady, Bank Indonesia is taking a cautious approach to balancing inflation control, currency stability, and sustainable economic growth. The bank remains focused on ensuring financial resilience while navigating ongoing global uncertainties.
