economy

Bank Indonesia Directs The BI Rate To Maintain Inflation At A Level Of 1.5-3.5 Percent

The Governor of Bank Indonesia (BI), Perry Warjiyo, stated that BI is directing its monetary policy regarding the benchmark interest rate (BI-Rate) to achieve an inflation target in the range of 2.5 plus or minus 1 percent for the years 2025 and 2026.

In line with this, BI has reduced the BI-Rate twice throughout 2025, specifically in January 2025 and May 2025, by 25 basis points (bps) each time, bringing it down to 5.75 percent and 5.50 percent, respectively.

"Moving forward, BI will continue to monitor the potential for further reductions in the BI-Rate to stimulate economic growth, while ensuring that inflation remains within its target and that the exchange rate stability aligns with its fundamentals," Perry remarked during a Working Meeting of the Budget Agency of the House of Representatives of the Republic of Indonesia with the Minister of Finance, the Minister of National Development Planning/Head of Bappenas, and the Governor of BI in Jakarta on Tuesday.

In June 2025, he explained that BI maintained the benchmark interest rate at 5.50 percent due to the high level of uncertainty in the global financial markets.

"The decision aligns with the inflation forecasts for 2025 and 2026, which remain stable and controlled within the target range of 2.5 plus or minus 1 percent. This is part of the effort to maintain the stability of the Rupiah exchange rate in accordance with its fundamentals, as well as to contribute to economic growth," stated Perry.

For your information, the current benchmark interest rate or BI-Rate is at 5.5 percent, with the deposit facility interest rate at 4.75 percent and the lending facility interest rate at 6.25 percent.

Meanwhile, the Central Statistics Agency (BPS) reported that the annual inflation rate was recorded at 1.87 percent year on year (yoy) in June 2025, with the Consumer Price Index (CPI) standing at 108.27 in June 2025.

Tag: Bank Indonesia BI Rate Perry Warjiyo