BUSINESS
Bank Indonesia Lowers Interest Rate to 5.75 Pct. as per January 2025
PHOTO: Setkab.go.id
SEAToday.com, Jakarta - Indonesian central bank Bank Indonesia (BI) has announced a 25-basis-point (bps) reduction in its benchmark BI 7-day Repo Rate (BI7DRR), bringing it down to 5.75 percent. The decision was made during the BI Board of Governors (RDG) meeting on Wednesday (1/15).
In tandem with the rate cut, the central bank also lowered the lending facility rate by 25 bps to 6.5 percent and the deposit facility rate by 25 bps to 5 percent.
BI Governor Perry Warjiyo explained that the move aligns with the central bank’s monetary policy stance, aimed at maintaining inflation within the target range of 2.5 percent ±1 percent for 2025 and 2026, while also supporting sustainable economic growth.
The BI rate plays a critical role in influencing banking rates across the country. A lower BI rate typically leads to reduced deposit and lending rates at banking institutions, which can stimulate economic activity by encouraging borrowing and spending.
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