- Decision
- Maintain
- Rate change
- 0 bps
- BI-rate
- 4.75%
Bank Indonesia’s Board of Governors kept the BI-Rate unchanged at 4.75% while maintaining the Deposit Facility at 3.75% and the Lending Facility at 5.50%, judging the stance appropriate for safeguarding rupiah stability and attracting foreign portfolio inflows amid heightened global uncertainty, yet still supporting economic recovery. After trimming the policy rate by a cumulative 150 bp since September 2024—including a 25 bp cut in September 2025—the central bank has now left it steady at the October and November meetings. Policy implementation focuses on “pro-market” operations and measured secondary-market SBN purchases, active spot, NDF and DNDF interventions (now also in CNY and JPY), continued issuance of Bank Indonesia Rupiah Securities (SRBI) to manage liquidity, and a stronger Macroprudential Liquidity Incentive (KLM) to hasten bank rate cuts and credit to priority sectors, complemented by expanded digital-payment initiatives. Consumer price index inflation eased to 2.86% y/y in October, with core at 2.36%, comfortably inside the 2.5 ± 1 % target range, while GDP grew 5.04 % y/y in Q3 and credit growth moderated to 7.36 % y/y in October. Externally, the Q3 current-account moved into surplus, FX reserves rose to USD 149.9 bn (covering 6.2 months of imports), the rupiah traded at IDR 16,735 per USD on 18 Nov—down 0.69 % from end-October—and portfolio flows turned positive with USD 1.8 bn net inflows up to 17 Nov. The central bank notes a resurgence of global volatility linked to the US policy outlook and safe-haven shifts, keeping world growth at a projected 3.1 % for 2025, and reiterates readiness to consider further BI-Rate reductions as long as inflation stays within target and exchange-rate stability is preserved.
Rate evolution
From June 2025 to September 2026, Bank Indonesia cut the BI-Rate by 75 basis points from 5.50% to 4.75% between July and September 2025, then held it at 4.75% in October 2025 and for the following six meetings before shifting into tightening, lifting the rate to 5.50% in May 2026 and 5.75% in June 2026. The mid-2025 cuts and the October 2025 pause reflected inflation forecasts for 2025 and 2026 that remained low within the 2.5±1% target, efforts to maintain rupiah stability in the face of still-high global uncertainty, and support for growth as domestic demand and credit remained soft. At the October meeting, Bank Indonesia said it would continue to assess the transmission of the easing already delivered, the growth and inflation outlook, and rupiah stability when considering room for further BI-Rate cuts, while strengthening macroprudential policy to push lending rates lower, raise liquidity and support credit growth.
Through late 2025 and early 2026, the emphasis shifted from room for further easing to external resilience as capital flows turned more volatile, the rupiah weakened and Bank Indonesia pressed banks to pass earlier easing through to lending rates. The policy turn then hardened as turmoil from the Middle East war, higher oil prices, a stronger dollar, high US Treasury yields and foreign exchange pressures prompted Bank Indonesia to prioritise stability, with April signalling readiness to tighten further if needed, May’s increase framed as pre-emptive, and June’s further 25-basis-point increase aimed at strengthening rupiah stabilisation and keeping inflation within the 2.5±1% target in 2026 and 2027. Bank Indonesia held the BI-Rate at 5.75% from July through September as global volatility persisted, with the September decision focused on rupiah stability amid strong external pressures, the inflation target and sustainable growth, while strengthening incentives to attract foreign capital inflows and accelerating money and foreign exchange market deepening.