Bank Indonesia Has Reduced The Benchmark BI Rate To 5.75% As Of January 2025

Bisnis-Arief Hermawan

Bank Indonesia Has Reduced The Benchmark BI Rate To 5.75% As Of January 2025

Friday, 17 Jan 2025

Bank Indonesia (BI) has made the decision to lower the benchmark interest rate, known as the BI-Rate, by 25 basis points (bps) to a level of 5.75% during the Board of Governors Meeting (RDG) held on January 14-15, 2025.

In addition to the benchmark rate, the deposit facility rate has also been reduced to 5.00%, while the lending facility rate remains unchanged at 6.5%.

Governor Perry Warjiyo stated that the decision to lower the BI rate to 5.75% aligns with the continued low inflation forecasts for 2025 and 2026, which are expected to remain within the target range of 2.5% plus or minus 1%.

He emphasized that maintaining the stability of the rupiah in accordance with fundamental factors is essential for controlling inflation and supporting economic growth. Perry expressed these points during a press conference on January 15.

Looking ahead, Perry indicated that BI will continue to steer monetary policy to keep inflation within its target and stabilize the exchange rate based on fundamental conditions, while also considering opportunities to promote economic growth in response to both global and national dynamics.

Furthermore, macroprudential policies and payment systems will be directed to support sustainable economic growth.

The implementation of accommodative macroprudential policies will persist to encourage banking credit and financing to priority sectors for growth and job creation, including small and medium-sized enterprises (SMEs) and the green economy. This will be achieved through the enhancement of the Macroprudential Liquidity Incentive Policy (KLM), while still adhering to prudent principles.

Additionally, the payment system policies will be aimed at fostering growth, particularly in the trade sector and SMEs, by strengthening the reliability of payment system infrastructure and industry structure, as well as expanding the acceptance of digital payment systems.