Bank Indonesia Holds Key Rate at 5.75% Amid Global Uncertainty

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JAKARTA, investortrust.id – Indonesia’s central bank has kept its benchmark interest rate unchanged at 5.75% this April, a move aimed at maintaining macroeconomic stability amid global uncertainty and a weakening local currency. Bank Indonesia, the nation's monetary authority, also held its deposit facility rate at 5.00% and lending facility rate at 6.50%.

The decision, announced following the central bank’s Board of Governors meeting on Tuesday and Wednesday, comes as policymakers seek to anchor inflation expectations and ensure the rupiah remains aligned with economic fundamentals, despite increasing external pressures.

Bank Indonesia Governor Perry Warjiyo said the rate decision was consistent with the central bank’s dual mandate: price stability and supporting sustainable growth.

"The Board of Governors Meeting on April 22–23, 2025, has decided to maintain the BI Rate at 5.75%," Perry stated in a virtual press conference on Wednesday, April 23. "This policy supports inflation forecasts for 2025 and 2026 within our target of 2.5 percent, plus or minus one percent, while also maintaining rupiah stability amid heightened global uncertainty."

He added that Bank Indonesia would continue to monitor room for potential future rate cuts, particularly if conditions allow without jeopardizing the exchange rate.

Analysts Back Cautious Stance

The move was widely anticipated by analysts, including Teuku Riefky, an economist at the Institute for Economic and Social Research, Faculty of Economics and Business, University of Indonesia, or LPEM FEB UI.

“BI should maintain the BI Rate at 5.75% and focus on interventions to stabilize the rupiah,” Riefky said in a written statement on Wednesday, April 23.

He acknowledged that while recent inflation data showed consumer prices were below the central bank’s target range, this was due to temporary deflationary pressures following the expiry of the government’s electricity discount subsidy in February.

Looking ahead, Riefky warned that pressure on the rupiah was likely to persist in the coming months, driven by continued global volatility and escalating trade tensions.

“Given these factors, BI likely has little room to cut its policy rate without triggering additional pressure on the rupiah,” he added.