- Decision
- Maintain
- Rate change
- 0 bps
- BI-rate
- 4.75%
Bank Indonesia’s Board of Governors left the BI-Rate unchanged at 4.75% – with the Deposit Facility at 3.75% and the Lending Facility at 5.50% – citing the need to stabilise the rupiah amid heightened global uncertainty while safeguarding the 2026-27 inflation goal of 2.5 ± 1 percent and supporting growth. Following cumulative easing of 150 bp since September 2024, including a 25 bp cut in September 2025, the policy rate has now been on hold at 4.75 percent for four consecutive meetings. To reinforce transmission, the central bank will intensify FX interventions through offshore NDFs, on-shore DNDFs and spot markets, continue measured secondary-market purchases of government bonds, and calibrate pro-market monetary operations, including optimised issuance of Bank Indonesia Rupiah Securities (SRBI). December 2025 CPI inflation stood at 2.92 % y/y with core at 2.38 %, and GDP growth is projected at 4.7–5.5 % for 2025 and 4.9–5.7 % in 2026; bank credit expanded 9.69 % in 2025, within the 8–11 % target range. International reserves rose to USD156.5 bn (covering 6.4 months of imports), though portfolio outflows of USD1.6 bn had pushed the rupiah to IDR 16,945 per USD, 1.5 % weaker than end-December. Globally, Bank Indonesia highlighted a softer 2026 world growth forecast of 3.2 %, limited room for further Fed easing, elevated UST yields and escalating geopolitical tensions. The Board reiterated it “will continue to strengthen the effectiveness of monetary and macro-prudential easing” and stands ready to trim the BI-Rate further should contained inflation and external stability provide scope.
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.