Indonesia Interest Rate

Bank Indonesia kept its benchmark interest rate unchanged at 5.5% during its June 2025 policy meeting, following a 25 bps cut in May, in line with market expectations. The decision was supported by easing inflation, stability in the Rupiah exchange rate, and continued efforts to sustain economic growth. Annual inflation moderated to 1.60% in May 2025, down from April’s eight-month high of 1.95%, as price pressures subsided following the Eid al-Fitr festivities. Inflation remained within the central bank’s target range of 1.5% to 3.5%. Meanwhile, the Rupiah strengthened by 0.06% on a point-to-point basis against the US dollar (as of June 17 compared to end-May) and also appreciated against the currencies of major non-USD economies and key emerging market trade partners. Economic growth for 2025 is projected to fall within the central bank’s target range of 4.6% to 5.4%. The overnight deposit facility and lending facility rates were also held steady at 4.75% and 6.25%, respectively.