Bank Indonesia Holds Key Interest Rate Steady at 5.57%

April 23, 2025 | 07:18 pm

TEMPO.CO, Jakarta - Bank Indonesia (BI) Governor Perry Warjiyo announced that the central bank decided to maintain its benchmark interest rate at 5.75 percent after having dropped by 25 basis points in early January. 

“The BI Board of Governors Meeting on April 22 and 23, 2025, had come to a decision to maintain the BI rate at 5.75 percent,” Perry said in a press conference on Wednesday, April 23.

Additionally, Bank Indonesia also maintained the deposit facility rate at 5 percent and the lending facility rate at 6.50 percent. This decision, according to Perry, is aimed at keeping the inflation estimates for this year and the next under control, within the target range of 2.5±1 percent.

Rupiah stability is maintained amid global uncertainty, Perry said, adding that the central bank is keeping a close eye on the outlook for inflation and economic growth to be leveraged for a lower benchmark interest rate. 

Previously, the Institute for Economic and Community Research of the Faculty of Economics and Business, University of Indonesia (LPEM FEB UI) had predicted that the central bank would maintain its benchmark interest rate in April. LPEM FEB UI economist Teuku Riefky explained that global uncertainty remains high, which will prompt Bank Indonesia to hold its benchmark interest rate. 

The inflation rate, according to him, is still maintained after the end of the 50 percent discount on electricity tariffs in March 2025. However, Riefky assessed that the Indonesian economy is still facing challenges related to the rupiah exchange rate. Pressure on the rupiah will also continue in the coming months as global uncertainty triggered by trade war tension continues. 

The aggressive escalation of 'tit-for-tat' moves between the United States and China, said Riefky, further exacerbated global uncertainty. Meanwhile, in the last 30 days, the accumulated capital outflow from Indonesia reached US$1.99 billion and the rupiah exchange rate depreciated by 2.59 percent.

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