Bank Indonesia (BI) has decided to maintain its benchmark interest rate (BI Rate) at 5.5% in June 2025. This decision takes into account controlled inflation and a stable rupiah exchange rate amid rising global uncertainties. 

Under this policy, the deposit facility rate remains at 4.75% and the lending facility rate at 6.25%. 

“The decision to maintain the benchmark rate is consistent with contained inflation, a stable exchange rate amid high global uncertainty, and the need to continue supporting economic growth,” said BI Governor Perry Warjiyo in a press conference on Wednesday, June 18. 

Perry noted that core inflation in May 2025 stood at 2.4% year-on-year (yoy), remaining within the national target of 1.5%–3.5%. 

The rupiah has also strengthened to around IDR 16,200–IDR 16,300 per USD, after hitting IDR 17,340 in offshore markets in early April. 

This appreciation, according to Perry, is the result of BI’s active intervention in the foreign exchange market, including in Asia (Hong Kong), Europe, and the United States. 

“Bank Indonesia's commitment to intervening in the offshore non-deliverable forward market is very strong,” he added. 

Perry indicated that there is still room to cut the benchmark interest rate again. However, such a move would depend on inflation, rupiah stability, and global economic developments. 

“A rate cut is needed to accelerate credit distribution by banks,” he said. BI has already lowered the BI Rate twice this year— from 6.0% to 5.75% in January, and then to 5.5% in May. 

Future rate cuts would also depend on favorable global conditions. “Of course, the timing will depend on how global conditions evolve and, in particular, on the stability of the rupiah exchange rate,” Perry explained. 

He also said that the interest rate on Bank Indonesia Rupiah Securities (SRBI) could still be adjusted in line with national liquidity policies. 

“Of course, the SRBI rate will be adjusted according to market developments and the direction of national liquidity expansion,” he added. 

Beyond the BI Rate, Perry stated that Bank Indonesia is supporting economic growth through broader monetary operations. These include measures to inject liquidity into the banking sector. 

“Overall, our monetary policy remains expansionary in terms of liquidity size,” he said. 

He emphasized that BI will continue to maintain inflation control and rupiah stability. At the same time, BI is working with the government to encourage growth through liquidity incentives and other supportive policies. 

“We are adding liquidity incentives and other policies to boost credit financing and, of course, to support digitalization,” Perry said. 

This article is published in partnership with Katadata 

Original article here