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No: 27/250/DKom 

The Bank Indonesia Board of Governors decided on 21^st-22^nd October 2025 to hold the BI-Rate at 4.75%, while also maintaining the Deposit Facility (DF) rate at 3.75% and the Lending Facility (LF) rate at 5.50%. The decision is consistent with low inflation, projected in 2025 and 2026 within the 2.5±1% target corridor, ongoing efforts to maintain rupiah exchange rate stability in line with economic fundamentals as well as synergy to strengthen economic growth. Moving forward, Bank Indonesia will continue monitoring the transmission effectiveness of accommodative monetary policy, economic growth and inflation as well as rupiah exchange rate stability to consider further room for BI-Rate reductions. Bank Indonesia will also strengthen macroprudential policy to further lower interest rates, increase liquidity and drive credit/financing growth in pursuit of higher economic growth. Payment system policy remains oriented towards supporting economic growth by expanding the acceptance of digital payments, while strengthening the structure of the payment system industry and strengthening the resilience of payment system infrastructure. 

Bank Indonesia has, therefore, strengthened its monetary, macroprudential and payment system policy mix to strengthen economic growth, while maintaining stability through the following policy measures: 

1. Strengthening the pro-market monetary operations strategy to enhance the effective transmission of lower interest rates, increase liquidity, accelerate money market and foreign exchange market deepening and attract foreign capital inflows by: ​
   1. managing the interest rate structure of monetary instruments and forex swaps in line with monetary liquidity expansion and to accelerate lower deposit and lending rates in the banking industry, 
   2. increasing liquidity in the money market and banking industry by lowering the position of Bank Indonesia Rupiah Securities (SRBI) and purchasing government securities (SBN) in the secondary market in a measured manner, 
   3. expanding underlying repurchase agreements (repo) in BI monetary operations with other high-quality securities issued by financial services institutions (FSIs) formed or established by the Government to support government programs for public welfare and prosperity, 
   4. issuing BI-FRN (Floating-Rate Notes) and developing Overnight Index Swaps (OIS) for longer tenors to create a transaction-based interest rate structure in the money market, 
   5. ​​expanding the investor base for SukBI to include banks and non-banks, including non-residents, and 
   6. strengthening the function of Primary Dealers (PD) to increase SRBI transactions in the secondary market and repurchase agreement (repo) transactions between market players.
2. Strengthening the rupiah stabilisation strategy in line with economic fundamentals, primarily through domestic foreign exchange market intervention with a focus on spot and domestic non-deliverable forward (DNDF) transactions as well as intervention in offshore non-deliverable forward (NDF) transactions, while also purchasing government securities (SBN) in the secondary market to increase liquidity and maintain financial market stability.
3. Strengthening forward-looking and performance-based Macroprudential Liquidity Incentive Policy (KLM) (Appendix 1), effective from 1^st December 2025, through:
   1. incentives for banks committed to disbursing loans/financing to specific sectors (lending channel) and pricing loans/financing in line with the policy rate set by Bank Indonesia (interest-rate channel), 
   2. KLM incentives in the form of lending channel incentives, up to 5% of third-party funds (TPF), and interest rate channel incentives, up to 0.5% of TPF, bringing the total incentive to a maximum of 5.5% of TPF, 
   3. sectors eligible for lending channel incentives include: (i) the agricultural, manufacturing and downstream sector, (ii) services sector, including the creative economy, (iii) construction, real estate and housing sector, and/or (iv) MSME, cooperative, inclusion and sustainability sector, which are also priority sectors set by the Government to support economic growth, 
   4. the size of the incentive awarded to banks in the lending channel also considers adjustment factors for the realisation of credit/financing growth against the credit/financing growth commitments of the previous period, 
   5. the incentive in the interest rate channel is measured based on the speed at which banks adjust lending rates to the policy rate set by Bank Indonesia.
4. Strengthening accommodative macroprudential policy by maintaining the: (i) Countercyclical Capital Buffer (CCyB) at 0%, (ii) Macroprudential Intermediation Ratio (MIR) in the 84-94% range, (iii) Loan/Financing-to-Value (LTV/FTV) ratio for property loans/financing at a maximum of 100% and downpayment requirements on automotive loans/financing at a minimum of 0%, effective from 1^st January - 31^st December 2026, (iv) Bank Foreign Funding Ratio (RPLN) at a maximum of 35% of bank capital, and (v) Macroprudential Liquidity Buffer (MPLB) at 4%, with repo flexibility of 4%, and the Sharia Macroprudential Liquidity Buffer at 2.5%, with repo flexibility of 2.5%.
5. Strengthening the assessment of prime lending rate (PLR) transparency with a focus on interest rates based on priority sectors in accordance with the scope of Macroprudential Liquidity Incentive Policy (KLM) policy (Appendix 2).
6. Fostering innovation and expanding digital acceptance through the Indonesia Digital Economy and Finance Festival in synergy with the Indonesia Fintech Summit and Expo 2025 (FEKDI and IFSE 2025), featuring various initiatives and programs, which include: (i) launching QRIS Tap In/Tap Out, (ii) initiating the QRIS Cross-Border Sandbox between Indonesia and South Korea, (iii) kicking off the Capacity Building Program and Literacy Synergy for Accelerating and Expanding Regional Digitalisation (KATALIS P2DD), and (iv) announcing the winners of the BI-OJK Hackathon 2025 and QRIS Exploring Indonesian Culture flagship program.
7. Strengthening and expanding international cooperation among central banks, including payment system connectivity and Local Currency Transactions (LCT), while promoting trade and investment in priority sectors in synergy with relevant institutions. 

Bank Indonesia is strengthening policy synergy with the Financial System Stability Committee (KSSK) to maintain financial system stability. Bank Indonesia is also strengthening policy synergy with the Government to maintain stability and support economic growth in line with the Government's Asta Cita program.​​ 

The global economy continues tracking a moderating trend due to US reciprocal tariffs and persistently high uncertainty. The US has imposed additional tariffs on pharmaceuticals, furniture and the automotive sector, effective from 1^st October 2025, and announced plans to introduce an additional 100% tariff on products from China. Various indicators point to weaker global trade performance because of US tariff policy, as reflected by slower imports and exports to and from most countries. In the US, the economy remains sluggish, thereby perpetuating a weaker labour market. Economies in Europe, Japan and India remain weak as a result of household consumption despite the fiscal-monetary stimuli introduced. Meanwhile, China's economy accelerated in the third quarter of 2025 due to fiscal stimuli. Such developments will impact economic growth in 2025, with the forecast upgraded to 3.1% from the 3.0% projected previously. The probability of an upcoming reduction in the Federal Funds Rate (FFR) has increased in line with labour market weakness in the US. In the global financial markets, short-term US Treasury yields decreased, which prompted a lower DXY Index. Capital flows to emerging markets (EM) continue to fluctuate in line with the heightened uncertainty persisting in global financial markets. Such conditions demand vigilance and a strong policy response to mitigate the spillovers from high economic and global financial market uncertainty on the domestic economy. 

At home, economic growth in Indonesia remains solid and must be increased in line with economic capacity. The latest indicators pointed to economic growth in the third quarter of 2025, supported by higher exports in anticipation of US reciprocal tariffs, particularly in terms of crude palm oil (CPO) as well as iron and steel. Meanwhile, there remains a further opportunity to strengthen domestic demand, thereby increasing household consumption and investment. Government spending contributed to strengthening domestic demand and economic growth in the third quarter of 2025. By sector, economic growth was driven by solid agricultural production, manufacturing and trade. Spatially, regional economic growth in Java and Sumatra are expected above the previous projections due to manufacturing and agriculture. Overall, economic growth in the latter half of 2025 is forecast to improve in line with the implementation of government priority projects related to food and energy security, defence and security, as well as the Government's Economic Policy Package for 2025, which includes social assistance disbursements in the fourth quarter of 2025. Bank Indonesia will also continue strengthening the national policy mix by optimising its monetary, macroprudential and payment system policy mix in synergy with the fiscal stimuli and real sector policies of the Government to drive national economic growth. Overall, therefore, economic growth in 2025 is projected above the midpoint of the 4.6-5.4% range, before accelerating in 2026. 

Indonesia's Balance of Payments (BOP) remains sound, thereby supporting external resilience. The Current Account (CA) in the third quarter of 2025 is projected to record a surplus, supported by a maintained trade surplus in September 2025. Non-oil and gas exports tracked an upward trend despite global economic moderation given the front-loading of exports in anticipation of US reciprocal tariffs, including shipments of CPO as well as iron and steel bound for India and China. The Capital and Financial Account (CFA) is expected to run a deficit in response to net outflows of portfolio investment given high global uncertainty and servicing external debt, despite positive foreign direct investment (FDI). From September 20^th October 2025, portfolio investment recorded a net outflow of USD5.26 billion, prompting intervention by Bank Indonesia to stabilise rupiah exchange rates. The position of foreign reserves at the end of September 2025 remained solid at USD148.7 billion, equivalent to 6.2 months of imports or 6.0 months of imports and servicing government external debt, which is well above the international adequacy standard of around 3 months of imports. Moving forward, the trade surplus and foreign capital inflows are expected to be maintained. Consequently, Bank Indonesia projects resilient BOP performance in 2025, with a narrower current account deficit forecast in 2025 than the previous projection. In 2026, Bank Indonesia expects BOP performance to remain solid, underpinned by a healthy CA and increasing capital flows in line with Indonesia's promising economic outlook. 

Rupiah exchange rates remain stable, supported by Bank Indonesia's stabilisation policy against a backdrop of high global uncertainty. The value of the rupiah against the US dollar on 21^st October 2025 stood at Rp16,585, appreciating by 0.45% (ptp) compared with the level recorded at the end of September 2025. The rupiah experienced 1.05% (ptp) depreciation in September 2025 compared with the level at the end of August 2025 due to high uncertainty. Maintaining rupiah stability, Bank Indonesia intervened in the spot market as well as the offshore NDF and onshore DNDF markets, while also purchasing SBN in the secondary market. Bank Indonesia's policy response was positive, with the rupiah regaining lost value in October 2025. The increasing conversion of foreign exchange into rupiah by exporters after the Government strengthened policy concerning the foreign exchange proceeds of exports of natural resources (DHE SDA) further bolstered the value of the rupiah. Moving forward, Bank Indonesia expects the rupiah to remain stable, underpinned by Bank Indonesia's commitment to maintain rupiah stability, alongside attractive yields, low inflation and the positive economic growth outlook for Indonesia. Furthermore, Bank Indonesia continues strengthening its stabilisation 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. 

In general, mild inflationary pressures have been maintained within the target corridor. Consumer Price Index (CPI) inflation was recorded at 2.65% (yoy) in September 2025. Core inflation remained low at 2.19% (yoy), impacted by economic growth that remains below capacity, monetary policy consistency to anchor inflation expectations to the target corridor, as well as low imported inflation. Administered prices (AP) also remained low at 1.10% (yoy) after the Government adjusted fuel prices and discounted airfares, contrasting higher retail prices for cigarettes. Meanwhile, volatile food (VF) inflation accelerated to 6.44% (yoy), primarily driven by higher prices of chilis, various alliums, rice and purebred chicken meat due to the end of the harvesting season and higher costs of production inputs. Looking ahead, Bank Indonesia is confident that headline inflation will remain under control and within the 2.5%±1% target corridor in 2025 and 2026. Low core inflation is projected in line with anchored inflation expectations, adequate economic capacity, managed imported inflation, as well as the positive impact of digitalisation. Bank Indonesia also expects VF inflation to remain manageable, supported by inflation control synergy between Bank Indonesia and the Central and Regional Government Inflation Control Teams (TPIP/TPID), while strengthening implementation of the National Movement for Food Inflation Control (GNPIP) in various regions. 

Bank Indonesia continues strengthening its policy mix to boost economic growth, while maintaining economic stability. Monetary policy includes BI-Rate reductions, rupiah exchange rate stabilisation and monetary liquidity expansion. Bank Indonesia has reduced the BI-Rate by 150 bps since September 2024 to 4.75%, the lowest level since 2022. In addition, Bank Indonesia is strengthening its rupiah stabilisation policy through 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. Meanwhile, Bank Indonesia has priced foreign currency monetary instruments competitively to maintain the attractiveness of placements in Indonesia and strengthen rupiah stability. Bank Indonesia is also expanding liquidity by lowering the position of SRBI monetary instruments from Rp916.97 trillion at the beginning of 2025 to Rp707.05 trillion on 21^st October 2025. Through close monetary and fiscal policy synergy, Bank Indonesia has also purchased SBN to the tune of Rp268.36 trillion (as of 21^st October 2025), including SBN purchased in the secondary market, alongside a debt switching program with the Government, totalling Rp199.45 trillion. Bank Indonesia is undertaking measured and transparent SBN purchases in the secondary market in line with market mechanisms, which is consistent with monetary programs to maintain economic stability, thereby strengthening monetary policy credibility. Monetary policy is also supported by Macroprudential Liquidity Incentive Policy (KLM) and accelerating payment system digitalisation in pursuit of sustainable economic growth. 

Bank Indonesia continues strengthening the implementation of Macroprudential Liquidity Incentive Policy (KLM) to revive bank lending/financing. As of the first week of October 2025, Bank Indonesia disbursed KLM incentives totalling Rp393 trillion, with Rp173.6 trillion allocated to state-owned banks, Rp174.4 trillion to national private commercial banks, Rp39.1 trillion to regional government banks and Rp5.7 trillion to foreign bank branches. By sector, the incentives were primarily disbursed to priority sectors, namely agriculture, trade and manufacturing, real estate, public housing, construction, transportation, storage, tourism and the creative economy, as well as the MSME, ultra micro and green sectors. Moving forward, Bank Indonesia will continue strengthening KLM policy to revive bank lending/financing by strengthening forward-looking KLM policy in pursuit of higher credit growth. Furthermore, incentives will be disbursed based on the speed at which banks adjust lending rates to the policy rate set by Bank Indonesia to accelerate the transmission of lower interest rates in the banking industry. 

Bank Indonesia is of the view that interest rates in the banking industry must be lowered further in line with the accommodative monetary policy stance and accumulated budget surplus placed by the Government in the banking industry. In the money market, consistent with the BI-Rate reductions totalling 150 bps taken since September 2024 and the monetary liquidity expansion policy instituted by Bank Indonesia, the INDONIA money market reference rate also trended downwards by 204 bps from 6.03% at the beginning of 2025 to 3.99% as of 21^st October 2025. Meanwhile, SRBI rates for tenors of 6, 9 and 12 months also tracked downward trends, namely by 251 bps, 254 bps and 257 bps since the beginning of 2025 to 4.65%, 4.67% and 4.70% on 17^th October 2025. SBN yields on tenors of 2 years decreased by 218 bps from 6.96% at the beginning of 2025 to 4.78% on 21^st October 2025, while SBN yields on tenors of 10 years have also decreased by 132 bps from a peak of 7.26% in the middle of January 2025 to 5.94% currently. Lower lending rates in the banking industry continue to experience a lag and efforts must be taken to accelerate further reductions. Compared with the BI-Rate reductions totalling 150 bps, the 1-month term deposit rate has only fallen by 29 bps from 4.81% at the beginning of 2025 to 4.52% in September 2025, primarily held back by the special rates offered by banks to large depositors, accounting for 26% of total third-party funds in the banking industry. Moreover, lending rate reductions have been even slower, falling just 15 bps from 9.20% at the beginning of 2025 to 9.05% in September 2025. 

Accommodative monetary policy and accumulated budget surplus placements by the Government in the banking industry have increased money supply. Growth of adjusted base money (M0), namely base money that has isolated the impact of lower reserve requirements (RR) due to the provision of macroprudential liquidity incentives (KLM), stood at 18.58% (yoy) in September 2025, higher than M0 growth (not adjusted) of 13.16% (yoy). Based on the affecting factors, higher adjusted M0 growth stemmed from the expansion of net claims on central government (NCG). Expansionary monetary policy was also reflected in growth of broad money (M2), which accelerated from 5.46% (yoy) in January 2025 to 7.59% (yoy) in August 2025. By component, stronger M2 growth was influenced by an uptick in narrow money (M1), namely from 7.25% (yoy) in January 2025 to 10.51% (yoy) in August 2025 as currency outside banks (COB) accelerated from 10.30% (yoy) in January 2025 to 13.41% (yoy) in August 2025. M2 growth was primarily driven by an increase of Net Foreign Assets (NFA). Moving forward, money supply is expected to accelerate in line with fiscal expansion. 

Loans disbursed by the banking industry must be increased to support economic growth. Credit growth in September 2025 was recorded at 7.70% (yoy), accelerating from 7.56% (yoy) in August 2025. On the demand side, the main contributors to restrained credit growth include the wait-and-see attitude prevalent in the corporate sector, the optimisation of internal financing in the corporate sector and persistently high lending rates. Consequently, undisbursed loans in the banking industry remain significant, reaching Rp2,374.8 trillion in September 2025, or 22.54% of the loans available, particularly in the corporate segment. By sector, the ratio of undisbursed loans is dominated by trade, the manufacturing industry and mining sector in terms of working capital loans. On the supply side, adequate bank financing capacity is supported by a high ratio of liquid assets to third-party funds (LA/TPF) at 29.29% and deposit growth of 11.18% (yoy) in September 2025 in line with fiscal expansion, including government fund placements in several big banks, alongside policy to increase liquidity and macroprudential policy incentives from Bank Indonesia. In general, bank appetite to lend remains healthy, as reflected by loose lending requirements, except for consumer loans and MSME loans given bank prudence to contain the credit risk affecting both segments. Growth of working capital loans and consumer loans moderated to 3.37% (yoy) and 7.42% (yoy) in the reporting period, contrasting higher growth of investment loans at 15.18% (yoy). MSME loans and sharia loans also moderated to 0.23% (yoy) and 7.55% (yoy), respectively. Overall, Bank Indonesia projects growth of loans disbursed by the banking industry in 2025 at the lower end of the 8-11% range, before accelerating in 2026. Moving forward, Bank Indonesia will continue strengthening coordination with the Government and KSSK Committee to revive bank lending/financing and improve the interest rate structure. 

Banking industry resilience remains solid. Bank capital remains high, accompanied by ample liquidity and low credit risk. The Capital Adequacy Ratio (CAR) in August 2025 stood at 26.03%, adequate to absorb risk. Non-performing loans (NPL) remained low in the banking industry at 2.28% (gross) and 0.87% (nett) in August 2025. The gross NPL ratio for MSME loans has shown early signs of improvement, reducing from 4.55% in August 2025 to 4.46% in September 2025, despite remaining relatively high. The latest BI stress tests indicate solid banking industry resilience, supported by maintained corporate repayment capacity and profitability. Moving forward, Bank Indonesia will continue strengthening policy synergy with the KSSK Committee to mitigate various domestic and global economic risks that could potentially disrupt financial system stability. 

Digital economic and financial transactions remained solid in the third quarter of 2025, supported by secure, seamless and reliable payment systems. The volume of digital payments^[1] in the third quarter of 2025 grew 38.08% (yoy) to reach 12.99 billion transactions, supported broader acceptance and the availability of more digital payment channels. Transaction volume through mobile and internet banking applications grew 13.11% (yoy) and 17.80% (yoy), respectively, including digital payment transaction volume through QRIS, which continued enjoying impressive 147.65% (yoy) growth, supported by increasing numbers of users and merchants. From an infrastructure perspective, the volume of retail transactions processed through BI-FAST grew 32.34% (yoy) to reach 1,223.82 million transactions, with a value of Rp3,024.08 trillion in the third quarter of 2025. On the wholesale or high-value side, the BI-RTGS system processed 2.76 million transactions in the third quarter of 2025, with a transaction value of Rp56,422.87 trillion. In terms of rupiah currency management, total currency in circulation grew 13.49% (yoy) to reach Rp1,200.05 trillion in the third quarter of 2025. 

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 systems maintained by Bank Indonesia, along with an adequate money supply of currency fit for circulation in appropriate denominations in the third quarter of 2025. A healthy payments industry structure is reflected by increasing payment system interconnection, accompanied by the continued expansion of the digital economy and finance ecosystem. Payment transactions based on the National Open API Payment Standard (SNAP) continue to grow and strengthen interconnection as SNAP adoption among various industry players expands. Meanwhile, Bank Indonesia will continue ensuring the availability, reliability and security of the retail and wholesale payment systems operated by Bank Indonesia and the industry. In addition, Bank Indonesia will continue strengthening the structure of the payment system industry with a focus on operational risk management and infrastructure technology among industry players and the digital economy and finance ecosystem. Furthermore, Bank Indonesia will safeguard the adequate availability of rupiah currency fit for circulation in suitable amounts throughout all regions of the Republic of Indonesia, particularly in frontier, outermost and remote regions.

Jakarta, 22^nd October 2025
Communication Department
Ramdan Denny Prakoso
Executive Director

^[1] Digital payments include transactions through mobile applications and the internet.