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-rate ended 2024 at 6.00%, compared to the end-2023 value of 6.00% and the figure a decade earlier of 7.75%. It averaged 5.45% over the last decade. 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 |
Central Bank resumes rate cuts in July
Small cut after last month’s hold: At its meeting on 15–16 July, Bank Indonesia (BI) decided to lower the BI-Rate by 25 basis points to 5.25% after having stood pat at its June meeting. The decision was largely in line with market expectations and brought the policy rate to the lowest level in over two and a half years.
Monetary policy drivers: BI justified the cut by highlighting that inflation is expected to remain within target this year and next, maintaining the stability of the rupiah in line with economic fundamentals is key and that further stimulus is needed to stimulate economic growth.
More cuts to follow: The Central Bank has indicated that it will continue to consider further reductions in interest rates to support economic growth. The majority of our panelists expect 25–50 basis points of further rate cuts by December, as inflation remains in range and GDP growth falls short of the official 5.2% target. The rest of our panelists see rates on hold for the remainder of 2025 amid elevated economic and trade uncertainty. The Bank will reconvene on 19–20 August.
Panelist insight: Nomura’s Euben Paracuelles and Nabila Amani said: “We maintain our forecast that BI will cut its policy rate by another 25bp this year to 5.00%, owing to the benign growth and inflation outlook. […] However, BI delivering the cuts will still be conditional on a supportive external environment owing to BI’s FX stability objective, which remains a priority. For now, we pencil in the next 25bp cut in December, when our U.S. economics team expects the Fed to resume cutting at the final FOMC meeting of the year.” ING’s Deepali Bhargava said: “With softer inflation prints helping real policy rates stay high and close to 3.4%, we continue to expect BI to deliver another 50bp of rate cuts by the first quarter of 2026. Rising risks to growth from weak household spending and an uncertain investment climate, combined with domestic policy uncertainty, increase the risks of higher-than-expected rate cuts.”
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 27 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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