Bank Indonesia Holds BI Rate at 5.50% Amid Stable Inflation Outlook and Geopolitical Risks
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JAKARTA, Investortrust.id — Bank Indonesia has decided to maintain its benchmark interest rate (BI Rate) at 5.50% following a two-day policy meeting, in line with market expectations. The decision reflects the central bank’s confidence in the country’s inflation outlook and its efforts to preserve rupiah stability while fostering sustainable economic growth.
Governor Bank Indonesia Perry Warjiyo announced the outcome of the June Board of Governors Meeting (RDG) in an online briefing.
“The Board of Governors Meeting on June 17–18, 2025, decided to hold the BI Rate at 5.50%,” Perry said on Wednesday.
In addition to holding the BI Rate, Bank Indonesia also kept the Deposit Facility rate at 4.75% and the Lending Facility rate at 6.25%.
According to Perry, the decision was consistent with projections that inflation would remain under control and within the 2.5% ±1% target range for 2025 and 2026. He also emphasized that keeping rates steady supports the rupiah’s exchange rate in line with its fundamentals and bolsters long-term economic stability.
“Going forward, Bank Indonesia will continue to assess the potential for rate cuts to support economic growth in line with global and domestic economic developments,” Perry added.
Bank Indonesia had previously reduced the benchmark rate to 5.50% in May 2025, marking the first rate cut since January, after holding it at 5.75% for four consecutive months.
Earlier this week, economist Teuku Riefky from the Institute for Economic and Social Research at the University of Indonesia (LPEM FEB UI) had recommended that the central bank maintain its policy rate at 5.50%. While acknowledging the recent appreciation of the rupiah, Riefky warned of short-term risks stemming from rising global uncertainty.
“Those risks include the renewed U.S. trade negotiations under Donald Trump and escalating tensions in the Middle East, particularly the conflict between Iran and Israel,” Riefky stated in a press release on Tuesday evening.