JAKARTA – Bank Indonesia (BI) has reduced the BI rate by 25 basis points (bps) to 5.75% from 6%, as announced during the Board of Governors Meeting (lit. Rapat Dewan Gubernur/RDG) held on January 14-15, 2025.

In addition, the Deposit Facility rate was lowered by 25 bps to 5%, and the Lending Facility rate decreased by 25 bps to 6.50%.

In a press release on Wednesday (15/1), Ramdan Denny Prakoso, Executive Director and Head of the BI Communication Department, stated that the RDG decision aligns with the projected low inflation for 2025 and 2026, which is estimated at 2.5±1%.

The decision also reflects the maintained stability of the rupiah in line with inflation control targets, as well as efforts to promote economic growth.

Moving forward, BI will continue to steer its monetary policy towards maintaining inflation within the target range and ensuring the exchange rate remains aligned with economic fundamentals.

 BI will also keep an eye on opportunities for economic growth in response to both global and domestic economic dynamics.

Meanwhile, macroprudential and payment system policies will remain geared towards supporting sustainable economic growth. A relaxed macroprudential stance will be adopted to encourage increased banking credit to priority sectors for growth and job creation, including MSMEs and the green economy. This will be pursued by strengthening the Macroprudential Liquidity Incentive Policy (KLM) starting January 2025.

Additionally, BI will focus its payment system policies on supporting growth, particularly in the trade sector and MSMEs.

To achieve this, BI will enhance the reliability of payment system infrastructure and industry structures while expanding the acceptance of payment system digitalization. (LK/ZH)