Indonesia's central bank cuts key interest rate to 5.75 pct


By Hayati
  • World
  • Thursday, 16 Jan 2025

JAKARTA, Jan. 15 (Xinhua) -- Indonesia's central bank has cut its benchmark banking interest rate by 25 basis points to 5.75 percent, Bank Indonesia said on Wednesday.

The decision was made following a two-day meeting of the Bank Indonesia Board of Governors on Tuesday and Wednesday, which also reduced deposit and loan facility rates by 25 basis points to 5.00 percent and 6.50 percent, respectively.

"This decision aligns with low inflation forecasts for 2025-2026, which remains within the target range of 1.5 to 3.5 percent, a stable rupiah, and efforts to boost economic growth," said Perry Warjiyo, governor of Bank Indonesia, during a press conference.

Perry said that future monetary policy will try to keep inflation and the rupiah exchange rate stable while fostering economic growth in the face of global and national dynamics.

Meanwhile, macroprudential policy aims to increase sustainable finance for key sectors such as micro, small, and medium-sized businesses and the green economy. Similarly, the payment system is being enhanced to ensure stable infrastructure for trade, MSMEs, and digitalization.

Bank Indonesia expects the country's economic growth in 2025 to be between 4.7 and 5.5 percent, slightly lower than the prior forecast range of 4.8 to 5.6 percent.

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