JAKARTA (Reuters) – Indonesia’s central bank kept its key interest rates unchanged on Wednesday, pausing its recent rate cuts while aiming to balance rupiah stability with efforts to boost economic growth.
Bank Indonesia held the 7-day reverse repurchase rate steady at 5.50%, matching the expectations of most economists surveyed by Reuters. The overnight deposit and lending rates also stayed the same, at 4.75% and 6.25%, respectively.
Since September, the central bank has lowered rates three times. However, it has cut its economic growth forecasts twice this year due to challenges such as weak domestic demand and global uncertainties caused by U.S. tariffs and conflicts. For 2025, Bank Indonesia maintained its growth forecast between 4.6% and 5.4%.
Governor Perry Warjiyo said during a press conference that the bank will keep monitoring the economy to find opportunities to support growth while controlling inflation and maintaining rupiah stability.
Annual inflation in May stood at 1.6%, near the lower end of the bank’s target range of 1.5% to 3.5%. Some analysts see this as a sign of weak household spending.
To help stimulate growth, the government recently introduced a $1.5 billion incentive package. This includes subsidies for transportation fares and cash and food aid planned for June and July.
