Bank Indonesia Keeps Benchmark Rate Steady at 4.75 Percent
Bank Indonesia kept its benchmark rate at 4.75 percent on Tuesday. Officials cited rupiah stability and Middle East tensions as key factors for the pause.
The central bank of Indonesia opted to maintain its key interest rates during its policy meeting on Tuesday, matching market expectations amid heightened global uncertainty. The decision to hold steady comes as policymakers monitor the potential economic fallout from ongoing conflict in the Middle East and its implications for Southeast Asia's largest economy. Bank Indonesia kept its benchmark 7-day reverse repurchase rate at 4.75%, a move predicted by 24 out of 26 economists in a recent poll. The central bank also left its overnight deposit facility and lending facility rates unchanged at 3.75% and 5.50%, respectively. This pause follows an easing cycle where the bank reduced the benchmark rate by a cumulative 150 basis points between September 2024 and September 2025. Monetary authorities have prioritized stability in recent months, particularly concerning the volatility of the US Dollar / Indonesian Rupiah currency pair. By keeping rates on hold, the bank aims to buffer the domestic economy against external shocks while maintaining attractive yields for investors. The current stance reflects a cautious approach to navigating the complex interplay of regional growth and global geopolitical risks.
