Indonesia Interest Rate

Bank Indonesia (BI) maintained its benchmark interest rate at 4.75% for the third consecutive meeting at its December 2025 policy meeting, in line with expectations and aimed at supporting the rupiah, despite signs of slowing economic growth. The decision came after cumulative cuts of 150 bps since September last year, bringing the rate to its lowest level since October 2022 to support economic growth. The decision reflects the central bank’s view that inflation in 2025–2026 will remain within the target range of 2.5% ± 1%, supported by a stable rupiah and ongoing measures to sustain economic growth. The latest data showed that GDP grew 5.04% yoy in Q3, easing from the two-year high reached in Q2, while annual inflation eased to 2.72% in November from October’s 18-month high of 2.86%. BI held its GDP growth forecasts at 4.7%–5.5% for 2025 and 4.9%–5.7% for 2026. It also kept the overnight deposit facility rate and the lending facility rate unchanged at 3.75% and 5.50%, respectively.