BI Maintains Interest Rate, Prioritizes Rupiah Stability Amid Global Uncertainty

BI 7-day Repo Rate: 5.75%
Deposit Facility: 5.00%
Lending Facility: 6.50%

The Bank of Indonesia’s Board of Governors Meeting (RDG BI) maintained the interest rate at 5.75%, with a Deposit Facility Rate of 5.00% and a Lending Facility Rate of 6.50% on February 19, 2025. Additionally, BI observed The Fed’s interest rate policy, which is expected to cut rates only once by 25 bps in early 2H25. US Treasury Yields (UST) for 10-year and 2-year bonds are expected to remain high due to fiscal deficit planning of 7.7% and 8.8% in 2025 and 2026, respectively, and discussions about eliminating the debt ceiling. The Dollar Index (DXY) also remains strong, reaching its highest level in the past year at 109.77, putting pressure on the rupiah against the US dollar. BI focuses on exchange rate stability to maintain economic growth amid ongoing global turbulence through open market operations in Spot markets, Domestic Non-Deliverable Forward (DNDF), and Government Securities (SBN) in the secondary market. BI considers its efforts successful in maintaining exchange rates at levels comparable to or in line with the currency pair groups of countries such as China, Korea, Malaysia, and Singapore.

By PHINTRACO SEKURITAS | Research
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