Bank Indonesia (BI) held its benchmark 7-day reverse repurchase rate at 4.75% during its Board of Governors Meeting on October 21–22, 2025, surprising markets that had expected another rate cut. Of 28 economists surveyed by Reuters, 21 had projected a 25-basis-point reduction. 

The Deposit Facility Rate and Lending Facility Rate were also kept unchanged at 3.75% and 5.50%, respectively. “This decision is consistent with BI’s outlook that inflation in 2025 and 2026 will remain within the target range of 2.5±1%, while supporting rupiah stability in line with economic fundamentals,” BI Governor Perry Warjiyo said during an online press conference on Wednesday. 

Perry stated that domestic economic conditions remain strong, with growth projected slightly above the mid-point of BI’s 4.6–5.4% forecast range for 2025 and expected to strengthen in 2026. The decision allows BI time to assess the impact of previous cuts while maintaining monetary stability. 

Since September 2024, BI has lowered rates seven times, totaling 150 basis points from a peak of 6.25%. The rupiah has remained relatively stable around IDR 16,600 per USD this month but has weakened 3% since the start of the year. 

President Prabowo Subianto aims to raise economic growth to 8% by the end of his term, from about 5% in the post-pandemic period. The government recently launched USD 2.8 billion in stimulus programs, including cash and food aid, construction jobs, and internship schemes. Finance Minister Purbaya Yudhi Sadewa also transferred USD 12 billion of government funds from BI to state banks to boost lending. 

Purbaya said BI could lower its rate to 3.5% if inflation stays near 2.5%. Inflation stood at 2.65% in September, within the bank’s 1.5–3.5% target range. 

Market analysts were split on BI’s latest move. Nico Laurens of Panin Sekuritas said expectations favored a 25-basis-point cut, but the rupiah’s recent slide from IDR 16,000 to IDR 16,500 per USD may have prompted caution. Josua Pardede of Permata Bank said inflation pressures remain limited, with the recent increase driven mainly by volatile food prices while core inflation stays stable.