Bank Indonesia holds BI-Rate at 4.75%

Bank Indonesia’s Board of Governors on 22 October 2025 kept the BI-Rate at 4.75% together with the Deposit Facility at 3.75% and the Lending Facility at 5.50%, judging that CPI inflation (2.65 % y/y in September, core 2.19 %) will stay within the 2.5 ± 1 % target through 2026, while a steady policy stance supports rupiah stability amid still-elevated global uncertainty and aids economic expansion. Following cumulative 150 bp of rate cuts since September 2024—including a 25 bp reduction in September 2025 that took the BI-Rate to its current record-low level—the central bank is reinforcing its pro-market monetary operations: it is steering money-market and FX-swap rates lower, trimming outstanding Rupiah securities (SRBI), conducting measured secondary-market SBN purchases, widening eligible collateral for repos and preparing BI floating-rate notes and longer-tenor OIS to bolster liquidity and rate transmission. Domestically, Q3 growth was lifted by palm-oil and steel exports ahead of reciprocal US tariff measures, though household demand and credit remain soft; bank lending grew 7.7 % y/y in September despite ample liquidity (AL/DPK 29.29 %) and low gross NPLs of 2.28%. Externally, the balance-of-payments position is resilient: Q3 is expected to show a current-account surplus, reserves stood at USD 148.7 bn (about 6.2 months of imports) and the rupiah firmed to IDR 16,585/USD on 21 October after September weakness, supported by spot, DNDF and offshore NDF intervention. The glo