The Bank Indonesia Board of Governors decided on 22^nd-23^rd April 2025 to hold the BI-Rate at 5.75%, while also maintaining the Deposit Facility (DF) rate and Lending Facility (LF) rate at 5.00% and 6.50%, respectively. The decision is consistent with efforts to maintain inflation in 2025 and 2026 within the 2.5±1% target corridor, maintain rupiah exchange rate stability in line with economic fundamentals despite increasing global uncertainty, and support economic growth. Moving forward, Bank Indonesia will continue to closely monitor the room for further BI Rate reductions, taking into account the stability of the Rupiah exchange rate, inflation prospects, and the necessity of supporting economic growth. Meanwhile, Bank Indonesia continues optimising pro-growth macroprudential and payment system policies to foster sustainable economic growth. The Macroprudential Liquidity Incentive Policy (KLM) was strengthened effectively from 1^st April 2025 to further boost bank lending and financing to priority sectors that support economic growth and job creation, aligned with the Government's Asta Cita programme. Payment system policy is also directed towards bolstering economic growth, particularly in the trade and MSME sectors. The reliability of the payment system's infrastructure and industry structure will continue to be strengthened, and the digital payments acceptance will be expanded.

Bank Indonesia has, therefore, strengthened its monetary, macroprudential and payment system policy mix to maintain stability and support sustainable economic growth through the following measures:

1. Strengthening the strategy of Rupiah exchange rate stabilisation in line with its fundamentals, primarily through Non-Deliverable Forward (NDF) transactions in offshore markets as well as spot and Domestic Non-Deliverable Forward (DNDF) transactions in the domestic market. This strategy is accompanied by the purchase of Government Securities (SBN) in the secondary market to maintain financial market stability and ensure sufficient liquidity in the banking sector.
2. Strengthening the strategy of pro-market monetary operations to enhance the effectiveness of monetary policy transmission, accelerate the deepening of the money and foreign exchange markets, and attract capital inflows, by:
   
1. maintaining the interest rate structure of monetary instruments and forex swaps to attract portfolio inflows to domestic financial assets,
2. strengthening the strategies for term-repo and forex swap transactions to maintain sufficient liquidity in the money market and banking industry, and
3. strengthening the function of Primary Dealers (PD) to increase Bank Indonesia Rupiah Securities (SRBI) transactions in the secondary market and repurchase agreement (repo) transactions between market players.
3. Strengthening the implementation of accommodative macroprudential policy to promote credit/financing growth in pursuit of sustainable economic growth, while maintaining the stability of the financial system by:
1. implementing enhancements to the Macroprudential Liquidity Incentive Policy (KLM) on 1^st April 2025 to encourage banking credit/financing to business sectors that support to job creation;
2. holding: (i) the Countercyclical Capital Buffer (CCyB) at 0%, (ii) the Macroprudential Intermediation Ratio (MIR) in the 84-94% range, (iii) the Macroprudential Liquidity Buffer (MPLB) at 5% with repo flexibility of 5%, and (iv) the sharia Macroprudential Liquidity Buffer (MPLB) at 3.5% with repo flexibility of 3.5%,
3. strengthening implementation of the Bank Foreign Funding Ratio (RPLN) to foster bank funding for liquidity management and disbursing loans to the real sector.
4. Strengthening the publication of assessments on the transparency of Prime Lending Rates (SBDK), with a more in-depth analysis of lending rates based on the priority sectors covered under the KLM (Appendix); and
5. Strengthening digital payments acceptance by: (i) implementing strategies to achieve QRIS targets from both supply and demand sides; (ii) educating merchants and users in various tourism destinations on cross-border QRIS; (iii) expanding implementation of the National Open API Payment Standards (SNAP) for industry payment services integration; and (iv) enhancing payment infrastructure stability and supervision of Payment Service Providers (PJP) and supporting institutions.

Bank Indonesia also continues to strengthen policy synergy with the Government to maintain stability and promote economic growth in line with the Government's Asta Cita programme. Synergy is focused on 7 (seven) policy areas, namely: (i) rupiah stabilisation policy to mitigate global shocks, (ii) monetary and fiscal policy coordination, (iii) efforts to promote economic financing through KLM policy, (iv) support to accelerate digital transformation within the Government, (v) efforts to strengthen food security and downstreaming, (vi) support to foster development of the green, Islamic and inclusive economy, and (vii) support for the development of human capital. In addition, Bank Indonesia will continue strengthening policy synergy with the Financial System Stability Committee (KSSK) to maintain the stability of the financial system. Bank Indonesia is also strengthening and expanding international cooperation in central banking areas, including payment system connectivity and the use of local currencies in transactions, as well as facilitating the promotion of investment and trade in priority sectors in collaboration with relevant institutions.

Global economic uncertainty has heightened since the introduction of the United States (US) reciprocal tariff policy. The announcement of the US' reciprocal tariff policy in early April 2025, followed by retaliatory measures by China and potentially other countries, exacerbated global economic fragmentation and dampened world trade volume. Consequently, global economic growth in 2025 is projected to decline from 3.2% to 2.9%, with the most significant decline expected in the US and China, due to trade war between the two countries. Economic growth in other advanced and developing economies is also forecasted to slow, given the direct impact of lower exports to the US and the indirect impact of lower trade volume with other countries. The trade war and its negative repercussions on growth in the US, China, and the global economy have triggered higher uncertainty in global financial markets and prompted investors towards risk-averse behaviour. US Treasury yields have declined, and the US dollar index against a range of global currencies (DXY) has weakened, amid rising expectations of a cut in the Federal Funds Rate (FFR). Capital flows have shifted from the US to countries and assets considered safe havens, particularly financial assets in Europe and Japan, as well as gold. Meanwhile, capital outflows from emerging markets have continued, thus intensifying currency pressures. This deterioration in global conditions demand a strengthening of policy responses and coordination to safeguard external resilience, maintain domestic stability, and support economic growth.

Indonesia's economic growth was maintained in the first quarter of 2025 despite increasing global uncertainty. Household consumption recorded positive growth, supported by economic confidence and income stability. Government spending related to the disbursement of the religious holiday allowance (THR), social spending, and various other incentives, accompanied by a seasonal surge in demand during the 1446 H Eid al-Fitr celebration, also boosted household consumption. Investment, specifically non-building investment, continued to bolster economic growth, as reflected by an increase in capital goods imports, particularly heavy equipment. Non-oil and gas exports in the first quarter of 2025 also increased, primarily supported by manufacturing commodities, such as machinery as well as iron and steel, to ASEAN member states. Spatially, economic growth in various regions remains solid, particularly in Kalimantan and Java. Moving forward, the US reciprocal tariff policy and retaliatory measures taken by China and potentially other countries, could impact the economic growth outlook for Indonesia. Bank Indonesia forecasts domestic economic growth in 2025 slightly below the midpoint of the 4.7-5.5% range, influenced by the direct impact of US import tariffs on lower Indonesian exports to the US and the indirect impact of weaker export demand from Indonesia's other trading partners, particularly China. In response, various policies must be strengthened to mitigate the impact of global economic moderation by boosting domestic demand and leveraging opportunities for export growth. Bank Indonesia continues strengthening its monetary and macroprudential policy mix to maintain stability and support economic growth, while accelerating payment system digitalisation. Furthermore, Bank Indonesia continues strengthening synergy with the fiscal stimuli of the (central and local) Government, including full support for the implementation of various government programmes and fully supporting implementation of the Government's Asta Cita program.

Indonesia's Balance of Payments (BoP) remains sound, thereby supporting external resilience. Indonesia amassed a trade surplus in March 2025 totalling USD4.3 billion, up from USD3.1 billion the month earlier. Meanwhile, foreign capital inflows to domestic financial instruments in the form of portfolio investment recorded a net inflow totalling USD1.6 billion since the beginning of the year until the end of March 2025. In April 2025 (as of 21^st April 2025), portfolio investment recorded a net outflow of USD2.8 billion due to the strong impact of global uncertainty after the US Administration announced its reciprocal tariff policy. The latest developments indicate early signs that outflow pressures are beginning to subside, particularly in terms of government securities (SBN), in line with the robust economic outlook for Indonesia, accompanied by solid external resilience. Foreign reserves position at the end of March 2025 was recorded high at USD157.1 billion, equivalent to 6.7 months of imports or 6.5 months of imports and servicing government external debt, which is well above the international adequacy standard of around 3 months of imports. In 2025, solid BOP performance will be supported by a manageable current account deficit in the range of 0.5-1.3% of GDP, accompanied by a maintained capital and financial account surplus despite persistently high global uncertainty.

The Rupiah exchange rate remains under control, supported by Bank Indonesia's stabilisation policies amid heightened uncertainty in global financial markets. Against the US dollar, the rupiah on 27^th March 2025 stood at Rp16,560, gaining 0.12% (ptp) in value compared with the level recorded at the end of February 2025. Notwithstanding, strong currency pressures on rupiah exchange rates materialised in offshore markets (NDF) during the domestic national religious holiday to celebrate Eid-ul-Fitr 1446 H, triggered by US reciprocal tariff policy. On 7^th April 2025, Bank Indonesia intervened continuously in offshore NDF markets in Asia, Europe, and New York to stabilise the rupiah against intense global pressures. This policy response has resulted positive outcome, as reflected in the controlled and strengthening Rupiah to Rp16,855 per US dollar on 22^nd April 2025 from a level of Rp16,865 when the domestic markets opened after the national holiday on 8^th April 2025. Rupiah movements remain in line with other regional currencies and consistent with domestic economic fundamentals to maintain economic stability. Moving To this end, BI continues to monitor inflation and economic growth outlook as well as the exchange rate movements in considering further monetary easing (data-dependent). This has been well-communicated as BI's forward guidance to the market in our monthly board meeting's press releases. Bank Indonesia expects rupiah will remain stable, underpinned by Bank Indonesia's commitment to maintain rupiah stability, together with attractive yields, low inflation and a positive economic growth outlook for Indonesia. Furthermore, Bank Indonesia continues strengthening its stabilisation policy response, including prudent intervention in offshore NDF markets and triple intervention strategy with a focus on spot and domestic non-deliverable forward (DNDF) transactions, while also purchasing government securities (SBN) in the secondary market. Bank Indonesia also continues optimising the full panoply of monetary instruments available, which includes strengthening its pro-market monetary operations strategy through the SRBI, Bank Indonesia Foreign Exchange Securities (SVBI) and Bank Indonesia Foreign Exchange Sukuk (SUVBI) instruments to boost policy effectiveness in terms of attracting portfolio inflows and supporting efforts to strengthen the rupiah exchange rate.

Consumer Price Index (CPI) inflation remained low in March 2025, supporting economic stability. CPI inflation in March 2025 was recorded at 1.03% (yoy), accompanied by manageable core inflation recorded at 2.48% (yoy) in line with BI-Rate policy consistency by Bank Indonesia to anchor inflation expectations. Volatile food (VF) inflation stood at 0.37% (yoy), supported by the adequate supply of major food commodities and close synergy to manage inflation between Bank Indonesia and the Central and Regional Government Inflation Control Teams through the National Movement for Food Inflation Control (GNPIP) in various regions. Meanwhile, administered prices recorded shallower 3.16% (yoy) deflation in the reporting period compared with 9.02% (yoy) deflation the month earlier, which was primarily influenced by the discontinuation of government policy to discount electricity rates for households with an installed electrical capacity of <2,200VA. Looking ahead, Bank Indonesia is confident CPI inflation will remain under control and within the 2.5%±1% target corridor in 2025 and 2026. Core inflation is projected to remain manageable in line with anchored inflation expectations, adequate economic capacity, managed imported inflation, as well as the positive impact of digitalisation. Bank Indonesia also expects volatile food (VF) inflation to remain manageable, underpinned by inflation control synergy between Bank Indonesia and the (central and regional) Government.

Bank Indonesia continues to strengthen its monetary policy response, which includes optimising its pro-market monetary operations strategy to maintain rupiah stability and achieve the inflation target. As an integral part of money market and foreign exchange market deepening efforts and to attract foreign capital inflows to domestic financial markets, Bank Indonesia continues optimising its pro-market SRBI, SVBI and SUVBI monetary instruments. As of 21^st April 2025, the respective positions of SRBI, SVBI and SUVBI instruments stood at Rp881.86 trillion, USD1.40 billion and USD277 million. Therefore, non-resident holdings of SRBI totalled Rp209.90 trillion as of 21^st April 2025, accounting for 23.80% of total outstanding. The implementation of Primary Dealers (PD) since May 2024 has also increased SRBI transactions in the secondary market along with repurchase agreement (repo) transactions between market players, thereby strengthening the effectiveness of monetary instruments that support Rupiah stability and inflation control. In addition, Bank Indonesia is also purchasing SBN in the secondary market to strengthen monetary operations in close synergy with the fiscal policy of the Government. In 2025 (as of 22^nd April 2025), Bank Indonesia has purchased SBN to the tune of Rp80.98 trillion, namely through the secondary market totalling Rp54.98 trillion and the primary market totalling Rp26.00 trillion, in the form of treasury bills (SPN), including sharia SPN. Moving forward, Bank Indonesia will continue optimising the various innovations already introduced to strengthen external economic resilience in Indonesia and enhance the effectiveness of monetary policy transmission.

Monetary policy transmission remains effective despite higher risk stemming from volatile global dynamics. In line with the BI-Rate reduction in January 2025 and the monetary operations strategy instituted by Bank Indonesia, the INDONIA money market rate also trended downwards, namely to 5.77% on 21^st April 2025 from 6.03% at the beginning of January 2025. The SRBI interest rates for 6, 9, and 12 months tenors as of 16 April 2025 also declined, yet remained attractive for foreign capital inflows, falling from 7.16%, 7.20%, and 7.27% respectively at the beginning of January 2025 to 6.59%, 6.61%, and 6.64% as of 16 April 2025. Yields on government securities (SBN) also remained attractive, although the yield for the 2-year tenor decreased from 6.96% to 6.54%, while the 10-year tenor declined slightly from 6.98% to 6.94%. Bank interest rates also remained low, supported by ample banking liquidity in line with the implementation of the strengthened KLM and the publication of Prime Lending Rate (SBDK) transparency assessments. Sufficient liquidity has improved pricing efficiency in the banking industry, thus boosting new loan disbursements. The 1-month term deposit rate and lending rate were also relatively stable in March 2025 at 4.77% and 9.20%, respectively.

Bank credit continued to grow, thereby supporting economic growth. Credit growth stood at 9.16% (yoy) in March 2025, down from 10.30% (yoy) in February 2025. Growth of investment loans remained comparatively high at 13.36% (yoy), while growth of consumer loans and working capital loans were recorded at 9.32% (yoy) and 6.51% (yoy), respectively. On the supply side, lending standards and liquidity conditions were still adequate, although a number of banks began to face obstacles in increasing funding, both Third Party Funds (DPK) and other sources for lending. On the demand side, the main contributors to credit growth are the manufacturing industry, mining sector and social services, contrasting the limited contribution of the construction sector and trade. Sharia financing recorded 9.18% (yoy) growth, while MSME loan growth stood at 1.95% (yoy) in the reporting period. Moving forward, various global uncertainty risks and their potential impact on the domestic economy demand vigilance due to the possible effect on the demand for credit and preferred liquid asset placements in the banking industry. Bank Indonesia projects growth of loans disbursed by the banking industry to move towards the lower end of the 11-13% range in 2025. Bank Indonesia will, therefore, continue strengthening accommodative macroprudential policies, which includes optimising KLM policy, and strengthening implementation of the Bank Foreign Funding Ratio (RPLN) to nurture bank funding for liquidity management and loan disbursements to the real sector. Bank Indonesia will also continue strengthening coordination with the Financial System Stability Committee (KSSK) to drive credit growth and support economic financing.

Bank Indonesia continues to strengthen KLM policy to bolster bank credit growth. Effective from 1^st April 2025, the KLM incentives have been increased from 4% to a maximum of 5% of third-party funds. As of the second week of April 2025, Bank Indonesia has disbursed KLM incentives totalling Rp370.6 trillion, increasing by Rp78.3 trillion from Rp292.3 trillion in the fourth week of March 2025. In the housing sector, KLM incentives increased by Rp84.0 trillion from the fourth week of March 2025 given implementation of KLM strengthening efforts, effective from 1^st April 2025. Bank Indonesia has disbursed KLM incentives to state-owned banks totalling Rp161.7 trillion, national private commercial banks totalling Rp167.4 trillion, regional government banks totalling Rp35.7 trillion and foreign bank branches totalling Rp5.8 trillion. By sector, Bank Indonesia has disbursed incentives to priority economic sectors, namely agriculture, real estate, public housing, construction, trade and manufacturing, transportation, warehousing, tourism and the creative economy, MSMEs, ultra-micro and green.

Banking industry resilience remains solid, thereby strengthening financial system stability. Bank liquidity remained sufficient in March 2025, as reflected by a high ratio of liquid assets to third-party funds (AL/DPK) at 26.22%. In terms of capital, the capital adequacy ratio (CAR) of banks in February 2025 was recorded high at 26.95%. Credit risk remained under control, reflected in the low non-performing loan (NPL) ratio of 2.22% (gross) and 0.81% (net) in February 2025. Bank Indonesia's stress test results also show that banking resilience remains strong, and is supported by maintained corporate solvability and profitability. In addition, Bank Indonesia will continue strengthening policy synergy with the KSSK Committee to mitigate various domestic and global economic risks that could potentially disrupt banking industry resilience and financial system stability.

Digital economic and financial transactions continued growing in the first quarter of 2025, supported by secure, seamless and reliable payment systems. Digital payments​ grew 33.50% (yoy) to reach 10.76 billion transactions in Q1/2025, supported by all components. Transaction volume through mobile and internet banking applications grew 34.51% (yoy) and 18.89% (yoy), respectively. Similarly, digital payment transaction volume through QRIS continued to enjoy impressive 169.15% (yoy) growth, supported by increasing numbers of users and merchants. In terms of infrastructure, the volume of retail transactions processed through BI-FAST grew 57.68% (yoy) to reach 1.07 billion transactions, with a value of Rp2,741.81 trillion. The volume of wholesale transactions processed through BI-RTGS grew by 0.69% (yoy) to 2.47 million transactions with a value of Rp46,281.21 trillion. In terms of rupiah currency management, total currency in circulation grew 15.51% (yoy) to Rp1,240.12 trillion in the first quarter of 2025. Digital transactions via QRIS during the Ramadan and Eid-ul-Fitr festive period in 2025 also increased, with average transaction volume growth per user reaching 111% (yoy), accelerating from 76% (yoy) during the same festive period in 2024. Meanwhile, total currency in circulation grew 8.63% (yoy) during the Ramadan and Eid-ul-Fitr festive period in 2025, slightly higher than 8.44% (yoy) in the same festive period in 2024.

Payment system stability has been maintained, supported by stable infrastructure and a sound industry structure. In terms of the infrastructure, payment system stability is reflected in the seamless and reliable payment system maintained by Bank Indonesia, along with an adequate money supply of currency fit for circulation in the first quarter of 2025, including the Ramadan and Eid-ul-Fitr festive period. Regarding the structure of the payments industry, payment system interconnection and the digital economy and finance ecosystem continue to expand. Payment transactions based on the National Open API Payment Standard (SNAP) continue to grow as SNAP adoption among various industry players expands. Meanwhile, Bank Indonesia will continue ensuring the availability, reliability and security of the payment systems operated by Bank Indonesia and the industry. Furthermore, Bank Indonesia will ensure adequate availability of rupiah currency fit for circulation in suitable denominations throughout all regions of the Republic of Indonesia, particularly in frontier, outermost and underdeveloped regions.