Indonesia central bank keeps rates steady, as expected

[JAKARTA] Indonesia’s central bank held policy rates steady on Wednesday (Jun 18), as expected, pausing in its easing cycle while reiterating an objective to balance the stability of the rupiah with efforts to lift economic growth. Bank Indonesia kept the benchmark seven-day reverse repurchase rate at 5.50 per cent, as expected by 21 of 31 economists polled by Reuters.

It also left unchanged the overnight deposit and lending rates at 4.75 per cent and 6.25 per cent, respectively.

BI has cut interest rates three times since September. It has also downgraded its economic growth outlook twice this year, listing challenges such as slowing domestic demand and shaky global growth due to the impact of US tariffs and wars.

On Thursday, BI kept its 2025 growth forecast at a range of 4.6 to 5.4 per cent. Governor Perry Warjiyo said at a press conference that BI would continue to monitor for room to further support growth, while maintaining inflation within target and keeping the rupiah stable.

Annual inflation was 1.6 per cent in May, near the bottom of BI’s target range of 1.5 to 3.5 per cent, which some analysts say points to sluggish household spending. Trying to bolster growth, the government has launched a US$1.5 billion incentive package to stimulate demand, including subsidies for transportation fare and cash and food handouts for June and July. REUTERS