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May The Economy Be Stronger And Credit Grow

Bank Indonesia (BI) cut its benchmark interest rate by 25 basis points (bps) to 5.25 percent. In addition, BI also lowered the Deposit Facility rate by 25 bps to 4.50 percent and the Lending Facility rate by 25 bps to 6.00 percent at the BI Board of Governors' Meeting (RDG) on July 15-16, 2025. 

BI Governor Perry Warjiyo stated that this decision is consistent with the increasingly low inflation forecast for 2025 and 2026, within the target of 2.5 percent plus or minus 1 percent. It also aims to maintain the stability of the rupiah exchange rate in line with its fundamentals and to continue to stimulate economic growth. 

Perry stated that the Central Bank will continue to monitor opportunities for interest rate cuts to stimulate economic growth while maintaining rupiah exchange rate stability. 

"And to achieve the inflation target in line with the dynamics of the global and domestic economies," Perry said in the virtual announcement of the BI RDG results on Wednesday (July 16, 2025). Perry explained that Bank Indonesia (BI) has deployed all policy instruments to stimulate national economic growth, including through interest rate cuts and strengthening the banking and financing sectors. 

According to Perry, BI is also going all out to encourage economic growth and bank credit and financing. "We have lowered interest rates, and there is still room for further rate cuts," Perry admitted. 

In terms of accommodative macroprudential policy, Perry continued, it will continue to be optimized with various strategies to increase credit and financing, lower interest rates, and provide flexibility in managing banking liquidity to encourage sustainable economic growth. 

Perry stated that payment system policies are also aimed at supporting economic growth through expanding digital payment acceptance, as well as strengthening infrastructure and consolidating the structure of the payment system industry. "BI also continues to strengthen policy synergy with the government to maintain stability and encourage economic growth in line with the government's Asta Aita (Asta Aita)," he said. In addition, BI is strengthening policy synergy with the Financial System Stability Committee (KSSK) to maintain financial system stability. According to Perry, BI sees global economic uncertainty increasing again following the announcement of the United States' effective reciprocal tariff increase on several developed and developing countries. 

The US's reciprocal tariff hike, scheduled to take effect on August 1, 2025, is expected to weaken global economic growth prospects, particularly in developed countries. "Economic growth in the United States, Europe, and Japan is trending downward amidst expansionary fiscal policies and monetary policy easing in those countries," Perry said. 

Meanwhile, Indonesia's economic growth needs to continue to be stimulated amidst a weakening global economic outlook. In the second quarter of 2025, economic growth was supported by non-construction investment related to activities in the transportation sector. "Export performance was quite good, supported by exports based on natural resources and manufactured products," he explained. Furthermore, the rupiah exchange rate also strengthened, supported by Bank Indonesia's stabilization policy and continued foreign capital inflows. 

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Tag: Bank Indonesia Credit Grow RDG