The Bank Indonesia Board of Governors Meeting (RDG) on 17–18 June 2025 decided to maintain the BI-Rate at 5.50%, the Deposit Facility rate at 4.75%, and the Lending Facility rate at 6.25%. This decision is in line with the maintained inflation forecast for 2025 and 2026 within the target range of 2.5±1%, the stability of the Rupiah exchange rate in line with its fundamentals amid persistent global uncertainties, and the need to continue supporting economic growth. Moving forward, Bank Indonesia will continue to monitor the room for lowering the BI-Rate to further support economic growth, while maintaining inflation within the target and exchange rate stability in line with its fundamentals. At the same time, accommodative macroprudential policy continues to be optimized to support sustainable economic growth through various strategies to promote credit growth and enhance liquidity management flexibility for banks. Payment system policies are also directed to support economic growth by expanding the acceptance of digital payments, as well as strengthening infrastructure and consolidating the structure of the payment system industry.
The direction of the monetary, macroprudential, and payment system policy mix aimed at maintaining stability to support sustainable economic growth is supported by the following policy measures:
- Strengthening Rupiah exchange rate stabilization strategies in line with fundamentals, particularly through intervention in Non-Deliverable Forward (NDF) transactions in offshore markets, as well as spot and Domestic Non-Deliverable Forward (DNDF) transactions in domestic markets. This strategy is accompanied by the purchase of Government Securities (SBN) in the secondary market to maintain financial market stability;
- Enhancing pro-market monetary operations strategy to improve the effectiveness of interest rate transmission, ensure adequate liquidity, accelerate money market and foreign exchange (forex) market deepening, and encourage capital inflows, through:
- managing the interest rate structure of monetary instruments and forex swaps to strengthen the effectiveness of the interest rate transmission while maintaining the attractiveness of foreign portfolio inflows into domestic financial assets;
- strengthening the auction strategy for Bank Indonesia Rupiah Securities (SRBI) and purchasing Government Securities (SBN) in the secondary market to ensure sufficient liquidity in the money market and banking sector; and
- enhancing the role of primary dealers to increase SRBI transactions in the secondary market and repurchase agreement (repo) transactions among market participants;
- 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; and
- Expanding digital payment acceptance by accelerating preparations for cross-border QRIS implementation, namely: (i) Indonesia–Japan, particularly for outbound transactions to Japan, and (ii) Indonesia–China for pilot implementation;
- Extending the National Clearing System (SKNBI) and Credit Card (CC) policy until 31 December 2025, consisting of:
- SKNBI fee of Rp1 from Bank Indonesia to banks, and a maximum SKNBI fee of Rp2,900 from banks to customers; and
- minimum credit card payment requirement of 5% of the total bill and a late payment fee policy of a maximum of 1% of the total bill and not exceeding Rp100,000.
Bank Indonesia also continues to strengthen policy coordination with the Government to maintain stability and support economic growth in line with the Government's Asta Cita program. In addition, Bank Indonesia continues to enhance policy coordination with the Financial System Stability Committee (KSSK) to safeguard financial system stability. Bank Indonesia is also enhancing 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 slightly eased, although it remains high due to reciprocal tariff negotiations by the United States (US) and geopolitical tensions in the Middle East. Various indicators show that US tariff policies have had an impact on slowing global economic growth. Economic growth in advanced economies such as the US, Europe, and Japan is trending downward, despite the implementation of expansionary fiscal policies and monetary easing in those countries. China's economy is also slowing due to declining exports—particularly to the US—amid weakening domestic demand, while India's economy is projected to grow stronger, driven mainly by sustained investment. Meanwhile, inflationary pressures in the US have eased in line with the economic slowdown, although inflation in goods has increased due to tariff policies, reinforcing expectations of a downward direction for the Fed Funds Rate (FFR) going forward. In the global financial markets, the shifts of capital flows from the US to safe-haven assets as well as to emerging market financial assets continues. These developments have driven further weakening of the US dollar index against major currencies (DXY) and emerging market currencies (ADXY).
From the domestic side, Indonesia's economic growth must be continually strengthened amid global uncertainty arising from U.S. tariff policies and geopolitical tensions. Economic activity in Q2 2025 shows improved performance in non-oil and gas exports, influenced by front-loading of exports to the U.S. as exporters anticipate the effects of U.S. tariff policies. Meanwhile, sources of growth from domestic demand through household consumption and investment need to be further enhanced. On the Government's part, fiscal policies have been implemented to accelerate spending through the provision of the 13th-month salary for civil servants and transportation subsidies, as well as increased social assistance to beneficiary families (KPM). On Bank Indonesia's part, monetary policy easing through interest rate cuts and liquidity loosening has been accompanied by an increase in macroprudential liquidity incentives to promote credit and financing to priority sectors.
Indonesia's Balance of Payments (BOP) remains sound, supported by continued foreign capital inflows into portfolio investment, thereby strengthening external resilience. The trade balance recorded a surplus of USD 0.2 billion in April 2025, following a surplus of USD 4.3 billion in March 2025. The positive export performance is expected to continue in Q2 2025, mainly supported by exports of crude palm oil (CPO), electrical machinery, iron and steel, and organic chemicals. Foreign capital inflows into domestic portfolio instruments—particularly government securities (SBN)—have also continued, in line with positive economic prospects, attractive yields of Indonesian financial instruments, and easing global financial market uncertainty. Foreign capital flows into SBN in the second quarter of 2025 (up to 16 June) recorded net inflows of USD 1.7 billion. The foreign exchange reserves as of end-May 2025 remained high at USD 152.5 billion, equivalent to 6.4 months of imports or 6.2 months of imports and government external debt payments, well above the international adequacy standard of around 3 months of imports.
The Rupiah exchange rate has strengthened, supported by Bank Indonesia's stabilization policies and increased foreign exchange supply from residents and non-residents. The Rupiah appreciated by 0.06% (ptp) against the U.S. dollar in June 2025 (as of 17 June) compared to the end of the previous month. The Rupiah also appreciated against currencies of major emerging market trading partners and advanced economies (excluding the U.S. dollar). This development was influenced by capital inflows—particularly into SBN—and foreign exchange supply from residents, especially corporations, in line with increased conversion of foreign exchange into Rupiah by exporters following the implementation of strengthened government policies on Foreign Exchange Proceeds from Natural Resources (DHE SDA).
Consumer Price Index (CPI) inflation in May 2025 remained under control, supporting economic stability. CPI inflation was recorded at 1.60% (yoy). Core inflation was also contained at 2.40% (yoy), consistent with Bank Indonesia's policy rate (BI-Rate) in anchoring inflation expectations within the target. The volatile food category recorded deflation of 1.17% (yoy), supported by adequate supply of key food commodities and close coordination in inflation control by the Central and Regional Inflation Control Teams (TPIP/TPID) through the National Movement for Food Inflation Control (GNPIP). Administered price inflation stood at 1.36% (yoy), up from 1.25% (yoy) in the previous month, mainly driven by rising prices of drinking water (PDAM) tariffs and various tobacco products due to continued transmission of higher tobacco excise.
Bank Indonesia continues to strengthen monetary policy responses, including by optimizing the pro-market monetary operation strategy to improve policy transmission through interest rate channels following the BI-Rate cut. In the money market, in line with the BI-Rate reduction in May 2025 and Bank Indonesia's monetary operations, the INDONIA rate declined to 5.34% on 17 June 2025 from 5.77% prior to the rate cut announcement in May 2025. SRBI interest rates for 6-, 9-, and 12-month tenors as of 13 June 2025 also fell to 6.22%, 6.26%, and 6.27%, respectively, down from 6.40%, 6.44%, and 6.47% before the BI-Rate reduction. Yields on 2-year SBN declined from 6.16% to 6.13%, and 10-year yields dropped from 6.84% to 6.71%. Bank interest rates have also begun to decline, albeit modestly. The 1-month deposit rate was 4.81% in May 2025, slightly down from 4.83% in April 2025. The lending rate stood at 9.18% in May 2025, slightly down from 9.19% in April 2025.
The pro-market monetary operation strategy is also being further optimized to support effective policy transmission through adequate liquidity. In this context, pro-market monetary instruments—SRBI, SVBI, and SUVBI—continue to be optimized. As of 16 June 2025, the outstanding SRBI position stood at Rp811.11 trillion, supporting monetary policy-driven liquidity expansion. Meanwhile, the outstanding positions of SVBI and SUVBI over the same period stood at USD 2,060.5 million and USD 480 million, respectively. The implementation of primary dealers since May 2024 has also improved SRBI transactions in the secondary market and repurchase agreement (repo) transactions among market participants. Bank Indonesia has also purchased SBN from the secondary market to reinforce monetary policy-driven liquidity expansion, which also reflects strong synergy between monetary policy and the Government's fiscal policy. As of 17 June 2025, Bank Indonesia has purchased SBN worth Rp124.33 trillion in 2025, consisting of Rp87.04 trillion in the secondary market and Rp37.29 trillion in the primary market (in the form of Treasury Bills, including Islamic ones).
The role of bank credit in supporting economic growth needs to be continuously strengthened. Credit in May 2025 grew by 8.43% (yoy), lower than 8.88% (yoy) in April 2025. On the supply side, banks still showed a strong preference for investing in securities amidst tightening lending standards. Banking liquidity conditions remain adequate, although the growth of Third-Party Funds (TPF) has tended to slow from 5.51% (yoy) in January 2025 to 4.29% (yoy) in May 2025. On the demand side, credit growth was mainly driven by the social services, industrial, and other sectors, while credit to the trade, agriculture, and business service sectors still needs to be improved to support economic financing. By loan type, growth of investment loans, working capital loans and consumer loans in May 2025 stood at 13.74% (yoy), 4.94% (yoy) and 8.82% (yoy), respectively. Sharia financing grew by 9.19% (yoy), while MSME credit grew by 2.17% (yoy). Based on credit performance as of May 2025, Bank Indonesia projects growth of loans disbursed by the banking industry in 2025 in the range of 8-11%. Bank Indonesia continues to strengthen accommodative macroprudential policies, including through the Macroprudential Liquidity Incentive Policy (KLM). Total KLM incentives as of the second week of June 2025 reached Rp372 trillion, distributed to SOE banks (Rp164 trillion), national private commercial banks (Rp166.4 trillion), regional development banks (Rp36 trillion), and foreign bank branches (Rp5.6 trillion).
Banking resilience remains strong in supporting financial system stability. Banking liquidity remains adequate, capital is maintained at high levels, and credit risk is low. This adequate liquidity is reflected in the ratio of Liquid Assets to Third-Party Funds (LA/TPF) of 24.98% in May 2025. On the capital side, the banking Capital Adequacy Ratio (CAR) remained high at 25.41% in April 2025, indicating strong risk absorption capacity. Meanwhile, the Non-Performing Loan (NPL) ratio remained low at 2.24% (gross) and 0.83% (net) as of April 2025. Bank Indonesia's stress test results also show that banking resilience remains solid, supported by maintained corporate repayment capacity and profitability.
The performance of digital economic and financial transactions in May 2025 remained strong, supported by a secure, smooth, and reliable payment system. In terms of transactions, digital payments[1] in May 2025 reached 3.93 billion transactions, growing by 27.88% (yoy), supported by increases across all components. The volume of mobile and internet application transactions continued to grow by 29.32% (yoy) and 7.54% (yoy), respectively. Likewise, QRIS-based digital payment transactions grew significantly by 151.70% (yoy), supported by a rise in users and merchants. In terms of infrastructure, retail transactions processed through BI-FAST reached 393.73 million transactions (up 45.45% yoy), with a transaction value of Rp969.43 trillion. Meanwhile, large-value transactions processed through BI-RTGS decreased by 6.08% (yoy) to 0.77 million transactions with a total value of Rp14,450.03 trillion. On the currency management side, currency in circulation grew by 10.10% (yoy) to Rp1,143.09 trillion in May 2025.
Payment system stability remains well-maintained, supported by stable infrastructure and a healthy industry structure. From the infrastructure side, the stability of the payment system is reflected in the reliable operation of the Bank Indonesia Payment System (SPBI) and the sufficient supply of currency in both volume and quality in May 2025. On the industry structure side, interconnection among participants in the payment system continues to strengthen, along with the expanding Digital Economy and Finance (EKD) ecosystem. Payment transactions using the National Standard for Open API Payment (SNAP) also increased in line with broader adoption. Moving forward, Bank Indonesia will continue to ensure the availability, reliability, and security of SPBI infrastructure, both retail and wholesale, as well as the infrastructure of the industry's payment systems. Bank Indonesia remains committed to 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.
Global economic prospects remain in line with earlier projections. Economic growth in the United States (US) and China is expected to be in line with earlier projections, underpinned by the effects of the temporary agreement between the two countries to lower import tariffs. These developments have also lent support to the economic outlook of Europe and Japan, which remains broadly in line with previous forecasts. Meanwhile, India's economy is projected to grow stronger, driven mainly by sustained investment. Given these developments, global economic growth prospects for 2025 remain at 3.0%. Looking ahead, global economic uncertainty is expected to remain elevated due to ongoing tariff negotiations between the US and several countries, as well as escalating geopolitical tensions in the Middle East. This situation requires vigilance and stronger policy response and coordination to safeguard external resilience, maintain stability, and support domestic economic growth.
From the domestic front, various policy responses need to be continuously strengthened amid global uncertainty arising from U.S. tariff policies and geopolitical tensions. Indonesia's economic growth is projected to improve in the second half of 2025. Overall, Bank Indonesia forecasts that economic growth in 2025 will be in the range of 4.6–5.4%. Policy responses must continue to be strengthened to encourage economic growth from both domestic and external demand. Bank Indonesia will continue to enhance synergy to support economic growth through the strengthening of the policy mix—monetary, macroprudential, and payment system—along with the Government's fiscal and real sector stimulus policies, including the implementation of the Asta Cita program.
Indonesia's external economic resilience is expected to remain sound, supported by continued foreign capital inflows into portfolio investment amid slightly easing global economic uncertainty. Overall, the BOP in 2025 is projected to remain healthy, supported by a lower current account deficit estimated within the range of 0.5% to 1.3% of GDP, and continued surplus in the capital and financial accounts which increased primarily due to the improved outlook for government bonds (SBN) and equities.
The Rupiah is expected to remain stable, supported by Bank Indonesia's commitment to exchange rate stability, attractive yields, low inflation, and solid domestic growth prospects. Furthermore, Bank Indonesia continues strengthening its stabilization policy response, including measured intervention in offshore NDF markets and triple intervention strategy with a focus on spot and DNDF transactions, while also purchasing SBN in the secondary market. Bank Indonesia also continues optimizing 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 rupiah exchange rate stability.
CPI inflation is expected to remain under control and within the 2.5%±1% target corridor in 2025 and 2026. This inflation outlook is supported by Bank Indonesia's commitment to strengthening the effectiveness of monetary policy, as well as the close synergy between Bank Indonesia and the Central and Regional Governments in managing inflation. Bank Indonesia will continue to optimize its pro-market monetary operations strategy to enhance policy transmission effectiveness in maintaining inflation within the target, maintain rupiah stability in line with its fundamentals, and drive sustainable economic growth.
The role of bank lending needs to be further encouraged to support stronger economic growth. Based on credit performance as of May 2025 and the prospect of economic growth, Bank Indonesia projects growth of loans disbursed by the banking industry in 2025 in the range of 8-11%. Going forward, Bank Indonesia considers that lending rates need to continue to decline to support credit/financing distribution and economic growth. In this regard, Bank Indonesia also continues to strengthen accommodative macroprudential policies, including through the Macroprudential Liquidity Incentive Policy (KLM). Moving forward, Bank Indonesia will continue to encourage bank lending/financing supported by the expansion of funding sources and enhance synergy with the Government, financial authorities, ministries/agencies, banks, and business actors.
[1] Digital payments include transactions through mobile applications and the internet.
