Executive Summary

Key insights and market outlook

Bank Indonesia decided to maintain the BI Rate at 4.75% in December 2025, prioritizing rupiah stability amid global uncertainty ¹

³. The decision, made during the December 16-17, 2025 Monetary Policy Committee meeting, kept the Deposit Facility rate at 3.75% and Lending Facility rate at 5.5% ³. Governor Perry Warjiyo emphasized that this move supports currency stability while maintaining controlled inflation within the 2.5% ±1% target for 2026 ³.

Full Analysis

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Deep Dive Analysis

Bank Indonesia Maintains Monetary Policy Stance Amid Global Uncertainty

Key Decision and Rationale

In its December 2025 Monetary Policy Committee meeting, Bank Indonesia (BI) decided to maintain the BI Rate at 4.75%, keeping monetary policy accommodative while prioritizing rupiah stability ¹

³. The decision to hold rates steady was unanimous, with both the Deposit Facility rate and Lending Facility rate remaining unchanged at 3.75% and 5.5%, respectively ³.

Economic Context and Forward Guidance

Governor Perry Warjiyo explained that the decision was driven by the need to maintain currency stability amid heightened global uncertainty while supporting economic growth ²

³. The central bank noted that while inflation remains controlled within the 2.5% ±1% target for 2026, volatile food inflation remained relatively high at 5.48% year-on-year in November 2025, primarily due to limited shallot supplies ⁴.

Market Reaction and Analyst Views

The decision was largely anticipated by economists, with 22 out of 34 surveyed by Bloomberg expecting the rate to remain unchanged ³

. Economists from major banks supported BI's decision, noting that maintaining the current rate allows the central bank to assess the transmission of previous monetary easing ³.

Monetary Policy Transmission and Future Outlook

BI has been implementing various measures to support economic growth, including cumulative rate cuts of 150 basis points since September 2024 ²

. The central bank signaled potential for further rate adjustments depending on inflation and growth developments, maintaining flexibility in its monetary policy stance ³.

References