Bank Indonesia holds interest rates steady

Bank Indonesia (BI) decided on Wednesday to maintain the benchmark interest rate at 6.00 per cent following its meeting on December 17-18, 2024. It also kept the deposit facility interest rate at 5.25 per cent and the lending facility interest rate at 6.75 per cent.

This decision aligns with the central bank’s continued focus on ensuring that inflation remains within the target range of 2.5±1 per cent in 2024 and 2025, while supporting sustainable economic growth.

Monetary policy aims to stabilise the Rupiah exchange rate amidst rising global economic uncertainty caused by US policy direction and escalating geopolitical tensions, as per a report from the BI.

Going forward, Bank Indonesia will closely monitor the movement of the Rupiah exchange rate, inflation outlook, and the evolving economic conditions to assess the potential for future interest rate reductions.

Attribution: Bank Indonesia report

Subediting: M. S. Salama