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No: 27/219/DKom 

The Bank Indonesia Board of Governors decided on 16-17^th September 2025 to lower the BI-Rate by 25 bps to 4.75%, while also lowering the Deposit Facility (DF) rate by 50 bps to 3.75% and the Lending Facility (LF) rate by 25 bps to 5.50%. The decision is consistent with joint efforts to stimulate economic growth by maintaining low inflation, projected in 2025 and 2026 within the 2.5±1% target corridor, while maintaining rupiah exchange rate stability in line with economic fundamentals. Moving forward, Bank Indonesia will continue monitoring economic growth and inflation to consider further room for BI-Rate reductions based on rupiah exchange rate stability. Therefore, Bank Indonesia will continue strengthening monetary liquidity expansion and accommodative macroprudential policy to lower interest rates, boost liquidity and revive lending/financing 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 the effective transmission to 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, and 
   3. 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 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 1).
4. Expanding digital acceptance by strengthening the implementation of QRIS Cross-Border and QRIS TAP, and
5. 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 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 financial system stability. 

The global economy continues to moderate as a corollary of US reciprocal tariffs and persistently high uncertainty. Various indicators point to economic moderation in most countries, accompanied by growth disparity between jurisdictions. In the US, economic confidence has declined since the implementation of tariff policy, which has undermined household consumption and raised unemployment. Economic performance in China has also slowed due to lower exports, primarily to the US, in response to the reciprocal tariffs, coupled with weaker domestic demand, particularly investment. Economies in Europe and Japan are also tracking a downward trend given pressures on export performance. On the other hand, India's economy accelerated slightly in response to fiscal stimuli to drive consumption. Consequently, Bank Indonesia forecasts potentially lower economic growth in 2025 than the previous projection of around 3.0%. The restrained global economic outlook and milder inflationary pressures have pushed most central banks to favour accommodative monetary policy, excluding Japan. Higher unemployment in the US has strengthened expectations of an imminent reduction in the Federal Funds Rate (FFR). In the global financial markets, US Treasury yield decreased in line with expectations of an FFR reduction, which prompted a lower DXY Index. Against a backdrop of heightened uncertainty, global capital flows to gold are increasing, while capital flows to emerging markets (EM) are restrained. Moving forward, global financial market volatility will persist, which must be anticipated by strengthening various responses, accompanied by policy coordination to maintain domestic economic resilience. 

At home, economic growth in Indonesia must be increased in line with economic capacity. In the third quarter of 2025, several indicators pointed to retrained household consumption given lower consumer expectations, particularly among lower-middle-income households, coupled with limited job availability. Investment must be strengthened by accelerating the realisation of various government priority programs, including the development of special economic zones (KEK) in different regions. Meanwhile, exports are forecast to improve on the back of higher agricultural and manufacturing exports, particularly crude palm oil (CPO) to India in line with lower import duties. Bank Indonesia will continue strengthening policy coordination and synergy with the Government to accelerate economic growth, while maintaining economic stability. From a fiscal perspective, government spending is expected to increase in the second half of the year in line with the implementation of government priority projects relating to food and energy security as well as security and defence, alongside the Government's Economic Policy Package for 2025. Furthermore, Bank Indonesia will continue optimising its monetary, macroprudential and payment system policy mix to drive economic growth through lower interest rates, looser liquidity, increasing macroprudential incentives, as well as faster economic and financial digitalisation. By strengthening policy synergy between Bank Indonesia and the Government, economic growth in the second semester of 2025 is forecast to improve, bringing the projection for 2025 to above the midpoint of the 4.6-5.4% range. 

Indonesia's Balance of Payments (BOP) remains sound, thereby supporting external resilience. Trade Balance in July 2025 amassed a larger USD4.2 billion surplus, bolstered by agricultural and manufacturing exports, which is thus expected to maintain a narrow current account deficit in the third quarter of 2025. Meanwhile, the capital and financial account is expected to remain manageable, supported by direct investment and a sustained portfolio investment surplus. In the third quarter of 2025 (as of 15^th September 2025), portfolio investment to government securities (SBN) recorded net inflows of USD432 million, thereby maintaining the net inflows of USD1.6 billion recorded in the second quarter of 2025. The position of foreign reserves at the end of August 2025 was recorded at USD150.7 billion, equivalent to 6.3 months of imports or 6.1 months of imports and servicing government external debt, which is well above the international adequacy standard of around 3 months of imports. Bank Indonesia projects solid BOP performance in 2025, supported by a narrow current account deficit in the range of 0.5% to 1.3% of GDP, accompanied by a maintained capital and financial account surplus despite persistently high global uncertainty. 

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 in September 2025 (as of 16^th September 2025) appreciated by 0.30% (ptp) compared with the level recorded at the end of August 2025. Rupiah stability is supported by consistent stabilisation policy instituted by Bank Indonesia amid high uncertainty plaguing global financial markets and 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). In general, rupiah exchange rate movements are relatively stable compared with currencies in other developing economies and advanced economies. 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. Bank Indonesia also continues optimising the full panoply of monetary instruments available, which includes strengthening its pro-market monetary operations strategy to bolster rupiah exchange rate stability. 

In general, mild inflationary pressures have been maintained. Low Consumer Price Index (CPI) inflation was recorded in August 2025 at 2.31% (yoy), edged downwards by lower core inflation and administered prices (AP). Core inflation fell to 2.17% (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) inflation decelerated to 1.00% (yoy) after the Government adjusted non-subsidised fuel prices and discounted airfares to celebrate Indonesian Independence. Meanwhile, volatile food (VF) inflation accelerated to 4.47% (yoy), primarily driven by higher rice prices after the end of the harvesting season. Looking ahead, Bank Indonesia is confident that CPI 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 125 bps since September 2024 to 5.00%, 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 is also expanding liquidity by lowering the position of SRBI monetary instruments from Rp916.97 trillion at the beginning of 2025 to Rp716.62 trillion on 15^th September 2025. Through close monetary and fiscal policy synergy, Bank Indonesia has also purchased SBN to the tune of Rp217.10 trillion (as of 16^th September 2025), including SBN purchased in the secondary market, alongside a debt switching program with the Government, totalling Rp160.07 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 the credibility of monetary policy. 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 September 2025, Bank Indonesia disbursed KLM incentives totalling Rp384 trillion, with Rp170 trillion allocated to state-owned banks, Rp170 trillion to national private commercial banks, Rp38.5 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, real estate, public housing, construction, trade and manufacturing, 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 optimising the incentives for sectors with a high contribution to economic growth and job creation in line with the Government's Asta Cita program. 

Lower money market interest rates and SBN yields due to the accommodative monetary policy stance maintained by Bank Indonesia must be accompanied by interest rate reductions in the banking industry. In the money market, consistent with the BI-Rate reductions totalling 125 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 144 bps from 6.03% at the beginning of 2025 to 4.59% as of 16^th September 2025. Meanwhile, SRBI rates for tenors of 6, 9 and 12 months also tracked downward trends, namely by 210 bps, 213 bps and 219 bps since the beginning of 2025 to 5.06%, 5.07% and 5.08% on 12^th September 2025. SBN yields on tenors of 2 years decreased by 185 bps from 6.96% at the beginning of 2025 to 5.11% on 16^th September 2025, while SBN yields on tenors of 10 years have also decreased by 94 bps from a peak of 7.26% in the middle of January 2025 to 6.32% 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 125 bps, the 1-month term deposit rate has only fallen by 16 bps from 4.81% at the beginning of 2025 to 4.65% in August 2025, primarily held back by the special rates offered by banks to large depositors, accounting for 25% of total third-party funds in the banking industry. Moreover, lending rate reductions have been even slower, falling just 7 bps from 9.20% at the beginning of 2025 to 9.13% in August 2025. Bank Indonesia, therefore, acknowledges a further opportunity for the banking industry to immediately lower lending and deposit rates and increase new loan disbursements as part of the joint efforts to foster higher economic growth in line with the Government's Asta Cita program. 

Accommodative monetary policy has also increased money supply, which is expected to continue climbing in line with fiscal expansion by the Government to stimulate the real sector. 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 7.34% (yoy) in August 2025, significantly higher than M0 growth (not adjusted) of 0.34% (yoy) (Appendix 2). Based on the affecting factors, higher adjusted M0 growth stemmed from the expansion of Net Foreign Assets (NFA) given higher foreign reserves, contrasting the contraction of net claims on central government (NCG) to offset a further increase in adjusted M0 growth. Expansionary monetary policy was also reflected in growth of broad money (M2), which accelerated from 5.46% (yoy) in January 2025 to 6.53% (yoy) in July 2025. By component, stronger M2 growth was influenced by an uptick in narrow money (M1), namely from 7.25% (yoy) in January 2025 to 8.72% (yoy) in July 2025 as currency outside banks  accelerated from 10.30% (yoy) in January 2025 to 10.98% (yoy) in July 2025. M2 growth was primarily driven by an increase of Net Foreign Assets (NFA) in line with the higher position of foreign reserves. Other factors, namely net claims on central government (NCG) maintained a contractionary trend, accompanied by persistently low credit growth. Moving forward, money supply is expected to accelerate in line with fiscal expansion and higher credit growth. 

Loans disbursed by the banking industry must be increased to support economic growth. Credit growth in August 2025 remains weak at 7.56% (yoy), despite accelerating from 7.03% (yoy) in July 2025 (Appendix 3). On the demand side, the main contributors to restrained credit growth include the wait-and-see attitude prevalent in the corporate sector, persistently high lending rates and the propensity to use internal funds for business financing. Consequently, undisbursed loans in the banking industry remain significant, reaching Rp2,372.11 trillion in August 2025, or 22.71% of the loans available. By sector, the ratio of undisbursed loans is dominated by the manufacturing industry, mining sector, corporate services and trade in terms of working capital loans. On the supply side, ample liquidity in the banking industry supports new loan disbursements, as reflected by a high ratio of liquid assets to third-party funds (LA/TPF) at 27.25% in August 2025 in line with monetary liquidity expansion and KLM policy by Bank Indonesia, coupled with improving bank appetite to lend, as indicated by the lending requirement. Nevertheless, high lending rates remain a constraint to boosting bank lending/financing further in pursuit of higher economic growth. Bank Indonesia continues coordinating in synergy with the Government and KSSK Committee to accelerate bank lending/financing. Overall, Bank Indonesia projects growth of loans disbursed by the banking industry in 2025 in the 8-11% range. 

Banking industry resilience remains solid, thereby strengthening financial system stability. Bank capital remains high, accompanied by ample liquidity and low credit risk. The Capital Adequacy Ratio (CAR) in July 2025 stood at 25.88%, adequate to absorb risk. Non-performing loans (NPL) remained low in the banking industry at 2.28% (gross) and 0.86% (nett) in July 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 remained solid in August 2025, supported by secure, seamless and reliable payment systems. The volume of digital payments^[1] in August 2025 grew 39.79% (yoy) to reach 4.43 billion transactions, supported by all components. Transaction volume through mobile and internet banking applications grew 15.86% (yoy) and 18.85% (yoy), respectively, including digital payment transaction volume through QRIS, which continued enjoying impressive 145.07% (yoy) growth, supported by increasing numbers of users and merchants. From an infrastructure perspective, the volume of retail transactions processed through BI-FAST grew 27.54% (yoy) to reach 398.65 million transactions, with a value of Rp967.29 trillion in August 2025. On the wholesale or high-value side, the BI-RTGS system processed 876.89 thousand transactions in August 2025, with a transaction value of Rp17,170.27 trillion. In terms of rupiah currency management, total currency in circulation grew 12.14% (yoy) to Rp1,180.49 trillion in August 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 August 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 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, 17^th September 2025

Communication Department

Ramdan Denny Prakoso

Executive Director

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