Bank Indonesia (BI) officially cut its benchmark interest rate (BI Rate) by 25 basis points to 5.25% during the Board of Governors Meeting (RDG) held on July 15–16, 2025. At the same time, the Deposit Facility rate was lowered to 4.50%, and the Lending Facility rate to 6.00%. 

BI Governor Perry Warjiyo stated that this decision aligns with controlled inflation and the stability of the rupiah exchange rate. 

“This rate cut is consistent with the 2025–2026 inflation forecast remaining within the 2.5% ±1% target, maintaining rupiah exchange rate stability based on fundamentals, and the need to encourage economic growth,” Perry said during the RDG press conference on Wednesday, July 16. 

BI also left open the possibility for further easing depending on global and domestic developments. “We continue to observe the room for rate cuts while maintaining exchange rate stability and inflation targets,” Perry added. 

Driving Credit Growth and Banking Liquidity 

To support policy transmission, BI is strengthening monetary operations strategies, including enhanced interventions in the foreign exchange market and purchasing Government Securities (SBN) in the secondary market to maintain financial stability. 

Adjustments to monetary interest rate instruments and foreign exchange swaps are also optimized to effectively attract foreign capital inflows. Meanwhile, liquidity adequacy is maintained through Bank Indonesia Rupiah Securities (SRBI) auctions and SBN purchases. 

BI is also promoting transparency in credit interest rates for priority sectors by strengthening the publication of the Basic Credit Interest Rate (SBDK). 

Expanding Digital Payments and Global Cooperation 

On the payment systems front, BI is expanding digital acceptance. One example is the launch of cross-border QRIS with Japan and a trial of cross-border QRIS with China, starting August 17, 2025. 

“We are also continuously enhancing education and socialization of QRIS Without Scan (TAP) to make it easier to use,” Perry said. 

This is accompanied by strengthening international cooperation in central banking, payment systems, and transactions using local currencies, aligning with efforts to encourage investment and trade in priority sectors. 

This article is published in partnership with Katadata 

Original article here