Latest bank decision: At its meeting on 15 May, the Central Bank decided to lower the target for the overnight...
BI-Rate in Indonesia
Indonesia's central bank policy rates over the last decade were adjusted up and down multiple times to manage economic growth and inflation. The bank lowered rates to historic lows during the COVID-19 pandemic to stimulate the economy. Post-pandemic, as the economy recovered, there was a gradual shift towards normalizing rates in 2022 and 2023. Since 2024, the Bank has shifted its focus slightly to shore up the rupiah while also supporting economic growth.
The BI 7-day Reverse Repo Rate ended 2022 at 5.50%, higher than the 3.50% end-2021 value and lower than the reading of 7.50% a decade earlier. For reference, the average policy rate in Asia-Pacific was 3.70% at the end of 2022. For more interest rate information, visit our dedicated page.
Indonesia Interest Rate Chart
Note: This chart displays Policy Interest Rate (%) for Indonesia from 2019 to 2024.
Source: Macrobond.
Indonesia Interest Rate Data
| 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|
| BI-Rate (%, eop) | 3.75 | 3.50 | 5.50 | 6.00 | 6.00 |
| 3-Month JIBOR (%, eop) | 4.06 | 3.75 | 6.62 | 6.95 | 6.92 |
| 10-Year Bond Yield (%, eop) | 6.17 | 6.55 | 7.01 | 6.60 | 7.07 |
Bank Indonesia leaves rates unchanged in April
Loosening cycle paused for third consecutive time: At its meeting on 22–23 April, Bank Indonesia (BI) maintained the BI-Rate at 5.75%, pausing its loosening cycle for the third consecutive time this year.
Rupiah stability prioritized: The Central Bank’s decision to hold interest rates steady was motivated by the desire to have inflation within its 1.5–3.5% target range for 2025 and 2026, and ensure stability of the rupiah amid global trade uncertainties. Regarding economic activity, BI stated that economic growth was stable in Q1, giving the Bank room to hold rates steady.
Cuts projected ahead: While the release did not provide specific guidance on future decisions, BI said it would closely monitor the inflation and economic growth outlooks, as well as rupiah exchange rate movements. Most of our panelists expect BI to resume its loosening cycle at its next meeting on 20–21 May. Overall in 2025, our Consensus is for around 50 basis points worth of cuts.
Panelist insight: Analysts at the EIU said: “The rupiah has also been on a weakening trend in recent months. As a result, the central bank will also place a high importance on maintaining rupiah stability. This means that it will remain cautious and make only small adjustments to avoid putting excessive pressure on the currency. We expect this to result in a single and final 25-basis-point cut later in 2025. That said, if the rupiah recovers its value, there is a risk that BI will bring forward its interest-rate cut and/or opt for a greater number of cuts.”
Consensus Forecasts and Projections for the next ten years
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Indonesian interest rate projections for the next ten years from a panel of 26 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Indonesian interest rate.
Download one of our sample reports to visualize what a Consensus Forecast is and see our Indonesian interest rate projections.
Want to get access to the full dataset of Indonesian interest rate forecasts? Send an email to info@focus-economics.com.
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