Bank Indonesia Maintains Benchmark Rate at 5.75%, Citing Global Uncertainty and Inflation Stability

JAKARTA, investortrust.id – Bank Indonesia (BI) has decided to maintain its benchmark interest rate at 5.75% as of Wednesday, March 19, 2025. The central bank cited persistent global uncertainty and the need to reinforce external resilience while ensuring domestic economic stability as key factors behind the decision.

Additionally, BI kept the Deposit Facility rate at 5.00% and the Lending Facility rate at 6.50%.

Speaking at the March 2025 Board of Governors Meeting press conference, held at the Bank Indonesia headquarters in Jakarta, BI Governor Perry Warjiyo stated that prudent and well-coordinated policies were necessary to safeguard financial stability and sustain economic growth.

"The high level of global uncertainty requires an appropriate and well-coordinated policy response to strengthen external resilience, maintain stability, and drive domestic economic growth. Indonesia's economic expansion remains on track, with household consumption staying strong, although it needs further encouragement to leverage consumer confidence," Perry said.

Foreign Capital Inflow Remains Strong

BI’s decision aligns with its pro-stability monetary policy stance and forward-looking measures aimed at keeping inflation within the 2.5% ± 1% target range for both 2024 and 2025. This also takes into account the effectiveness of maintaining capital inflows and exchange rate stability.

Perry highlighted that from the beginning of 2025 until March 17, foreign capital continued to flow into Indonesia’s financial markets, particularly through purchases of government bonds (SBN) and Bank Indonesia securities (SRBI).

"Bank credit growth remains robust in supporting national economic expansion, with lending increasing by 10.3% year-on-year in February 2025," he added.

The Fed’s Policy Shift and Market Reactions

On the global front, Perry noted that the U.S. Federal Reserve is now expected to cut interest rates only once in 2025. The current Fed Funds Rate stands at 4.25%-4.50%.

"Previously, global funds flowed into U.S. dollars, but now we see a shift towards gold investments. This explains the increasing pressure in stock markets, which have seen foreign capital outflows," Perry explained.

Interest Rates powered by Investing.com.

Market Expectations Met

BI’s decision aligns with market forecasts, including projections from PT Bank UOB’s economist Enrico Tanuwidjaja, who had anticipated the central bank would hold its benchmark rate steady at 5.75%.

"We believe Bank Indonesia is likely to maintain its policy rate in the March 2025 Board of Governors Meeting," Enrico told Investortrust on Tuesday, March 18, 2025.