JAKARTA – The Board of Governors Meeting (RDG) of Bank Indonesia (BI) has decided to lower the benchmark interest rate by 25 basis points (bps) to 5.5%.

This marks the lowest policy rate level in the past two years. BI’s benchmark rate was last at 5.5% in December 2022.

“This decision is consistent with projected low and controlled inflation for 2025 and 2026, within the target range of 2.5% plus or minus 1%, efforts to maintain rupiah stability in line with its fundamentals, as well as to help support sustainable economic growth,” said BI Governor Perry Warjiyo during a press conference held today.

In addition, BI also cut the Deposit Facility rate to 4.75%, down from 5%. The Lending Facility rate was also reduced to 6.25%, from the previous 6.5%.

As previously reported by IDNFinancials.com, most economists and analysts had expected BI to lower its benchmark rate by 25 bps.

However, in a Bloomberg consensus survey, 11 out of 32 economists and analysts projected that BI would keep the benchmark rate unchanged at 5.75%. (KR/ZH)