The Indonesian Central Bank (BI) on Wednesday lowered its benchmark interest rate by 25 basis points to 5 percent, marking the third cut this year as the central bank seeks to spur growth amid controlled inflation and a stable outlook.
“The Board of Governors decided to cut the BI Rate by 25 basis points to 5 percent,” BI Governor Perry Warjito told the media following the closing of the central bank’s two-day Board of Governors’ Meeting on Aug. 19–20, 2025.
He added that the Deposit Facility and Lending Facility rates were also reduced to 4.25 percent and 5.75 percent, respectively,
As quoted by CNBC, market expectations had been split ahead of the meeting. A consensus of 13 financial institutions showed eight predicted the Indonesian central bank would hold rates steady, while five expected a 25-bps cut.
The latest decision follows earlier reductions in January and July, each by 25 bps, bringing the policy rate down from 6 percent at the end of 2024.
The rupiah weakened after the announcement, traded at Rp16,260 per US dollar on Wednesday afternoon, down 0.15 percent. The currency had earlier slipped as much as 0.47 percent to Rp16,310 per US dollar before paring losses.
The central bank said its easing stance remains consistent with efforts to support economic activity while ensuring inflation stays within the 2.5 percent ±1 percent target band for 2025 and 2026.
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