Jakarta, Indonesia Sentinel — Bank Indonesia has decided to lower its benchmark interest rate, known as the BI Rate, by 25 basis points to 5.25% in July 2025. The initiative marking a move to support economic growth amid easing inflation and heightened global uncertainty.
The announcement was made by BI Governor Perry Warjiyo during a press conference following the central bank’s July 2025 Board of Governors Meeting, held on July 15–16.
“The BI Board of Governors Meeting on July 15 and 16, 2025, decided to lower the BI Rate by 25 basis points to 5.25%,” Perry said on Wednesday (July 16).
In addition to the benchmark rate cut, Bank Indonesia also reduced the deposit facility rate and the lending facility rate by 25 basis points each, bringing them to 4.50% and 6.00%, respectively.
Governor Perry stated that the decision is in line with the central bank’s updated inflation outlook, which now forecasts inflation in 2025 and 2026 to remain within the target range of 2.5% ±1%. He also emphasized that the move supports exchange rate stability and reflects the need to stimulate domestic economic growth.
To support sustainable growth, the central bank also plans to maintain an accommodative macroprudential policy stance. This includes strategies to boost lending, lower borrowing costs, and enhance banking sector liquidity flexibility.
Bank Indonesia is also focusing on strengthening the national payment system. Measures include expanding digital payment adoption and reinforcing payment infrastructure and industry consolidation to help support the broader economy.
Meanwhile, Perry noted that the U.S. plan to implement reciprocal tariffs starting August 1, 2025, is expected to weaken the global economic outlook. In response, Bank Indonesia will continue to strengthen policy coordination and enhance its vigilance to mitigate persistent global financial market volatility and economic uncertainty.
Looking ahead, the central bank signaled openness to further rate cuts, depending on developments in global and domestic economic conditions.
“Going forward, Bank Indonesia will continue to monitor room for further rate cuts to boost economic growth while maintaining rupiah exchange rate stability and meeting inflation targets,” said Perry.
Bank Indonesia also reaffirmed its commitment to policy synergy with the Indonesian government to maintain macroeconomic stability and support growth, in line with the government’s Asta Cita national development agenda.
(Raidi/Agung)
