The Bank Indonesia (BI) Board of Governors meeting on 17-18 June 2025 decided to hold the benchmark interest rate at 5.5% for this month.
The deposit facility interest rate remains at 4.75%, and the lending facility interest rate remains at 6.25%.
According to BI Governor Perry Warjiyo, this decision is in line with maintaining the 2025 and 2026 inflation forecast within the target of 2.5% plus or minus 1 percentage point and the stability of the rupiah exchange rate. Maintaining the interest rate is also necessary to boost economic growth.
Perry explained that the decision takes into account both domestic and international conditions.
He noted that global economic uncertainty has eased slightly, although it remains high due to the dynamics of US reciprocal tariff negotiations and geopolitical tensions in the Middle East.
"Various indicators show that US tariff policies have impacted the slowing global economy. Economic growth in developed countries, namely the US, Europe, and Japan, is trending downward amid expansionary fiscal policies and monetary easing in those countries," Perry said in a press release on Wednesday (June 18, 2025).
China's economy has also slowed due to declining exports, particularly to the US, amid slowing domestic demand, while India's economy is expected to grow well, driven mainly by strong investment.
"With these developments, the outlook for global economic growth in 2025 remains at 3.0%," said Perry.
In his opinion, Indonesia's economic growth must also continue to be driven amid global uncertainty due to US tariff policies and geopolitical tensions.
BI noted that economic activity in Q2 2025 showed better non-oil and gas export performance, influenced by the front-loading of exports to the US as an anticipatory response by exporters to US tariff policies.
Meanwhile, sources of growth from domestic demand through household consumption and investment need to be further increased.