No. 27/133/DKom 

The Bank Indonesia (BI) Board of Governors decided on 17-18^th June 2025 to hold the BI-Rate at 5.50%, the Deposit Facility (DF) rate at 4.75% and the Lending Facility (LF) rate at 6.25%. The decision is consistent with low and controlled inflation projected in 2025 and 2026 within the 2.5%±1% target corridor, rupiah exchange rate stability in line with economic fundamentals amid persistently high global uncertainty and the ongoing need to drive economic growth. Moving forward, Bank Indonesia will continue monitoring further room to lower the BI-Rate in pursuit of economic growth, while maintaining inflation within the target range and exchange rate stability in line with economic fundamentals. Meanwhile, Bank Indonesia continues optimising accommodative macroprudential policy to foster sustainable economic growth, deploying various strategies to revive credit growth and enhance liquidity management flexibility in the banking industry. Furthermore, payment system policy is also oriented towards supporting economic growth by expanding the acceptance of digital payments, while strengthening infrastructure and effectively consolidating the structure of the payment system industry. 

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

1. Strengthening the rupiah stabilisation strategy in line with economic fundamentals, primarily through intervention in offshore non-deliverable forward (NDF) transactions as well as domestic foreign exchange market intervention with a focus on spot and domestic non-deliverable forward (DNDF) transactions, while also purchasing government securities (SBN) in the secondary market to maintain financial market stability.
2. Strengthening the pro-market monetary operations strategy to enhance monetary policy transmission effectiveness, maintain adequate 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 to strengthen the effective transmission of lower interest rates, while attracting portfolio inflows to domestic financial assets, 
   2. strengthening the strategies for Bank Indonesia Rupiah Securities (SRBI) auctions and purchasing government securities (SBN) in the secondary market 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 prime lending rate (PLR) publication transparency with a focus on interest rates based on priority sectors in accordance with the scope of Macroprudential Liquidity Incentive Policy (KLM) policy (Appendix).
4. Expanding digital acceptance by accelerating preparations for the implementation of QRIS Cross-Border: (i) between Indonesia and Japan, specifically for outbound transactions to Japan, and (ii) between Indonesia and China in terms of initiating QRIS Cross-Border trials.
5. Extending the tariff policy for the National Clearing System (SKNBI) and credit card policy until 31^st December 2025 as follows:
   1. National Clearing System fees of Rp1 for banks and up to Rp2,900 for bank customers, and 
   2. Minimum payment policy for credit cardholders of 5% of the outstanding balance and late payment penalties of 1% of the outstanding balance up to a maximum of Rp100,000.

Bank Indonesia is also strengthening policy synergy with the Government to maintain stability and nurture economic growth in line with the Government's Asta Cita program. 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 will also strengthen and expand 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. 

Global economic uncertainty eased slightly yet remains high due to dynamic negotiations of the reciprocal tariff policy introduced by the US, coupled with escalating geopolitical tensions in the Middle East. Various indicators point to global economic moderation triggered by US tariff policy. Economic growth in advanced economies, namely the US, Europe and Japan, is tracking a downward trend despite the implementation of expansionary fiscal policy and accommodative monetary policy. China's economy is decelerating on the back of lower exports, particularly to the US, amid softer domestic demand, contrasting solid growth in India driven by robust investment. Consequently, the world economic outlook for 2025 remains at 3.0%. Meanwhile, milder inflationary pressures in the US are consistent with economic moderation despite a spike in inflation of various commodities due to tariff policy, thereby strengthening expectations for a future reduction in the Federal Funds Rate (FFR). In global financial markets, a rebalancing of capital flows from the US to save-haven assets and also to financial assets in emerging markets continues. Such developments have continued pressuring the DXY Index and ADXY Index. Moving forward, global economic uncertainty is expected to remain elevated due to ongoing tariff negotiations between the US and several trading partners, accompanied by escalating geopolitical tensions in the Middle East. Such inauspicious conditions demand vigilance and a strong coordinated policy response to maintain external resilience, control stability and drive domestic economic growth. 

At home, economic growth in Indonesia must be strengthened constantly against a backdrop of global uncertainty caused by US tariff policy and geopolitical tensions. Economic activity in the second quarter of 2025 indicated improvements in terms of non-oil and gas export performance due to the frontloading of exports bound for the US as an anticipatory response by exporters to US tariff policy. Meanwhile, sources of growth from domestic demand through household consumption and investment must be strengthened. From a government perspective, fiscal policy has been implemented to accelerate spending through the disbursement of 13^th-month salaries for civil servants and transportation subsidies, while bolstering social assistance to beneficiary families (KPM). On the other hand, Bank Indonesia has lowered interest rates and loosened liquidity through various monetary policy instruments, accompanied by increasing macroprudential liquidity incentives to revive lending to priority sectors. Moving forward, national economic growth in Indonesia is projected to improve in the second semester of 2025, and overall, with Bank Indonesia forecasting economic growth in 2025 within the 4.6-5.4% range. The multifaceted policy response must be strengthened to drive economic growth in terms of domestic and external demand. Furthermore, Bank Indonesia will continue strengthening synergy to foster economic growth by bolstering its monetary, macroprudential and payment system policy mix, accompanied by fiscal stimuli and real sector policy from the Government, including implementation of the Asta Cita program. 

Indonesia's Balance of Payments (BOP) remains sound in line with maintained portfolio inflows, thereby supporting external resilience. In April 2025, the trade balance recorded a USD0.2 billion surplus, thus maintaining the USD4.3 billion surplus recorded in March 2025. Such positive export performance is expected to persist in the second quarter of 2025, primarily underpinned by exports of crude palm oil (CPO), electrical machinery, iron and steel, as well as organic chemicals. Portfolio investment inflows, dominated by  SBN, have been maintained in line with the promising economic outlook for Indonesia, high yields on domestic financial instruments and lower global financial market uncertainty. Foreign capital inflows to SBN instruments in the second quarter of 2025 (as of 16^th June 2025) recorded net inflows totalling USD1.7 billion. The position of foreign reserves at the end of May 2025 remained high at USD152.5 billion, equivalent to 6.4 months of imports or 6.2 months of imports and servicing government external debt, which is well above the international adequacy standard of around 3 months of imports. In 2025, Bank Indonesia expects solid BOP performance to be maintained, supported by a manageable current account deficit in the 0.5-1.3% of GDP range, accompanied by a maintained capital and financial account surplus despite persistently high global uncertainty. 

Rupiah exchange rates are appreciating, underpinned by Bank Indonesia's stabilisation policy and an increasing supply of foreign exchange by residents and non-residents. Against the US dollar, the value of the rupiah in June 2025 (as of 17^th June 2025) appreciated by 0.06% (ptp) compared with the level recorded at the end of May 2025. The rupiah also tended to appreciate against a basket of developing economies (DE) currencies, as major trading partners of Indonesia, and advanced economies (AE) currencies, excluding the US dollar. This was influenced by foreign capital inflows, particularly to SBN instruments, and foreign currency supply from residents, primarily the corporate sector, as exporters convert more foreign currency into rupiah after the implementation of government policy concerning the foreign exchange proceeds of exports of natural resources (DHE SDA). Moving forward, Bank Indonesia expects the rupiah to remain stable, underpinned by Bank Indonesia's commitment to maintain rupiah stability, together with 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. 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 rupiah exchange rate stability.

Consumer Price Index (CPI) inflation was controlled in May 2025, thus strengthening economic stability. CPI inflation in May 2025 was recorded at 1.60% (yoy), accompanied by manageable core inflation recorded at 2.40% (yoy), in line with BI-Rate policy consistency to anchor inflation expectations to the target corridor. Volatile food (VF) recorded 1.17% (yoy) deflation, 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 (AP) recorded 1.36% (yoy) inflation, up from 1.25% (yoy) the month earlier, which was primarily affected by higher prices of potable water and various cigarette products given the ongoing transmission of higher excise taxes on tobacco products. 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 VF inflation to remain manageable, supported by inflation control synergy between Bank Indonesia and the central and regional Government. 

Bank Indonesia continues strengthening its monetary policy response, which includes optimising its pro-market monetary operations strategy to improve monetary policy transmission through the interest rate channel after the recent reduction in the BI-Rate. In the money market, consistent with the BI-Rate reduction implemented in May 2025 and the monetary operations strategy instituted by Bank Indonesia, the IndONIA money market reference rate also trended downwards to 5.34% on 17^th June 2025 from 5.77% prior to the BI-Rate reduction announced in May 2025. Meanwhile, SRBI rates for tenors of 6, 9 and 12 months, as of 13^th June 2025, also tracked downward trends, namely to 6.22%, 6.26% and 6.27% from 6.40%, 6.44% and 6.47% before the BI-Rate reduction in May 2025. On the other hand, SBN yields on tenors of 2 years decreased from 6.16% to 6.13%, while yields on 10-year tenors decreased from 6.84% to 6.71%. Furthermore, interest rates in the banking industry have begun to decline, albeit moderately. In May 2025, the 1-month term deposit rate was recorded at 4.81%, down slightly from 4.83% in April 2025, while the aggregate lending rate stood at 9.18% in May 2025, retreating modestly from 9.19% in April 2025. Moving forward, Bank Indonesia acknowledges a further opportunity for the banking industry to lower interest rates and increase new loan disbursements to support stronger economic growth. 

Bank Indonesia continues optimising its pro-market monetary operations strategy to support effective monetary policy transmission through adequate liquidity. To that end, Bank Indonesia continues optimising its pro-market SRBI, SVBI and SUVBI monetary instruments. As of 16^th June  2025, the position of SRBI was recorded at Rp811.11 trillion, thereby supporting monetary policy to expand liquidity. Meanwhile, the respective positions of SVBI and SUVBI instruments in the same period were recorded at USD2,060.5 million and USD480 million. 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. In addition, Bank Indonesia is also buying SBN in the secondary market to strengthen monetary policy to expand liquidity, while simultaneously reflecting close synergy with the fiscal policy of the Government. In 2025 (as of 17^th June 2025), Bank Indonesia has purchased SBN Rp124.33 trillion, through the secondary market totalling Rp87.04 trillion and the primary market totalling Rp37.29 trillion in treasury bills (SPN), including sharia SPN. Moving forward, Bank Indonesia will continue optimising its pro-market monetary operations strategy to boost the effectiveness of monetary policy transmission towards achieving the inflation target and maintaining rupiah exchange rate stability. 

The role of loans disbursed by the banking industry to support economic growth must be increased further. Credit growth in May 2025 was recorded at 8.43% (yoy), following 8.88% (yoy) growth in April 2025. On the supply side, the banking industry's preference for investing in securities remains strong amid early signs of higher lending standards. In general, liquidity conditions in the banking industry remain adequate despite moderating growth of third-party funds (TPF) from 5.51% (yoy) at the beginning of January 2025 to 4.29% (yoy) in May 2025. On the demand side, the main contributors to credit growth are the Social Services sector, Manufacturing Industry and others sector, while loans/financing extended to the Trade sector, Agricultural sector and Corporate Services sector must be increased 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 recorded 9.19% (yoy) growth, while MSME loan growth stood at 2.17% (yoy) in the reporting period. Based on credit performance as of May 2025, Bank Indonesia projects growth of loans disbursed by the banking industry in 2025 in the 8-11% range. Bank Indonesia continues strengthening accommodative macroprudential policies to boost credit growth, which includes the KLM incentives. As of the second week of June 2025, Bank Indonesia disbursed KLM incentives totalling Rp372 trillion, with Rp164 trillion allocated to state-owned banks, Rp166.4 trillion to national private commercial banks, Rp36 trillion to regional government banks and Rp5.6 trillion to foreign bank branches. Moving forward, Bank Indonesia will continue nurturing bank lending, supported by the expansion of funding sources, while strengthening synergy with the Government, financial authorities, government ministries/agencies, banking industry and businesses. 

Banking industry resilience remains solid, thereby strengthening financial system stability. Bank liquidity remains ample, accompanied by high capital and low credit risk. Ample liquidity was reflected by a 24.98% ratio of liquid assets to third-party funds (LA/TPF) in May 2025. The Capital Adequacy Ratio (CAR) in April 2025 stood at 25.41%, adequate to absorb risk. This was supported by low non-performing loans (NPL), as a proxy of credit risk, as indicated by NPL ratios of 2.24% (gross) and 0.83% (nett) in April 2025. 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 continued growing in May 2025, supported by secure, seamless and reliable payment systems. Digital payments^[1] in May 2025 grew 27.88% (yoy) to reach 3.93 billion transactions, supported by all components. Transaction volume through mobile and internet banking applications grew 29.32% (yoy) and 7.54% (yoy), respectively. Similarly, digital payment transaction volume through QRIS continued to enjoy impressive 151.70% (yoy) growth, supported by increasing numbers of users and merchants. From an infrastructure perspective, the volume of retail transactions processed through BI-FAST grew 45.45% (yoy) to reach 393.73 million transactions, with a value of Rp969.43 trillion. On the wholesale or high-value side, the BI-RTGS system processed 0.77 million transactions, down 6.08% (yoy), with a transaction value of Rp14,450.03 trillion. In terms of rupiah currency management, total currency in circulation grew 10.10% (yoy) to Rp1,143.09 trillion in May 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 May 2025. 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 retail and wholesale payment systems operated by Bank Indonesia and the industry. 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, 18^th June 2025

Communication Department

Bambang Pramono

Director

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