Addin Anugrah Siwi, Jakarta – Indonesia's central bank lowered its benchmark interest rate for a fifth time this year, moving to support growth as inflation remains subdued and the rupiah stable.

Bank Indonesia cut the BI Rate by 25 basis points to 4.75 percent, Governor Perry Warjiyo said Wednesday after a two-day policy meeting. The deposit facility rate was reduced by 50 basis points to 3.75 percent, while the lending facility rate was set at 5.5 percent.

"The decision is consistent with our joint efforts to stimulate economic growth while keeping inflation low and stable," Perry told reporters in Jakarta. He added that inflation is expected to stay within the target range of 2.5 percent plus or minus 1 percent for both 2025 and 2026.

Perry said the rate cut will be reinforced by ample liquidity and macroprudential easing to boost credit flows to the real sector. "Liquidity expansion and accommodative macroprudential policies will continue to lower lending rates, increase liquidity, and stimulate financing to achieve stronger economic growth," he said.

So far this year, BI has trimmed its benchmark by a total of 125 basis points as inflationary pressures ease. The consumer price index has remained comfortably within the central bank's target band, giving policymakers room to prioritize growth.

The rupiah has also held relatively steady, supported by foreign reserves and ongoing government measures to maintain currency stability.

Looking ahead, Perry signaled that further policy easing remains possible. "Bank Indonesia will continue to assess the room for additional rate cuts to support higher economic growth, while ensuring inflation remains low and the rupiah stable in line with fundamentals," he said.

Source: https://jakartaglobe.id/business/bank-indonesia-cuts-benchmark-rate-to-47