Jakarta. Bank Indonesia (BI) held its benchmark interest rate steady at 4.75% following the Board of Governors’ Meeting held on Dec. 16–17, as the central bank prioritizes rupiah stability amid elevated global uncertainty.

In line with the decision, the Deposit Facility rate remained at 3.75%, while the Lending Facility rate stayed at 5.5%.

BI Governor Perry Warjiyo said the pause was consistent with the central bank’s efforts to safeguard exchange rate stability while continuing to strengthen monetary and macroprudential policy transmission to support economic growth.

“Going forward, Bank Indonesia will continue to assess the room for further BI-Rate cuts, taking into account the outlook for 2026 inflation, which is expected to remain within the 2.5±1% target range, as well as the need to encourage higher economic growth,” Perry said during a virtual press conference on Wednesday.

The year-end hold followed an aggressive easing cycle earlier in 2025, during which BI slashed rates by a cumulative 125 basis points. The central bank cut rates by 25 basis points each in January and May, followed by consecutive 25-basis-point reductions in July, August and September, bringing the policy rate to its current level.

Perry added that macroprudential easing would continue to be strengthened, particularly in providing liquidity to banks, with the aim of accelerating loan rate declines and boosting financing to the real sector, especially priority industries. Meanwhile, payment system policies will remain focused on strengthening digital infrastructure and payment acceptance to support inclusive and sustainable growth.

The decision was broadly in line with economists’ expectations. LPEM FEB UI macroeconomist Teuku Riefky said holding rates was appropriate, given that inflation through November 2025 stood at 2.75%, still within the target range.

“Bank Indonesia needs to remain focused on stabilizing the rupiah and be ready to intervene in the foreign exchange market if necessary to maintain capital inflows,” Riefky said.

Echoing that view, BCA chief economist David Sumual said BI was closely monitoring the effectiveness of earlier incentives as well as global financial market developments. He noted there could still be room for two to three rate cuts in 2026, provided US labor market and inflation conditions prompt a more accommodative stance from the Federal Reserve.

“At this stage, we are waiting for clearer US economic data, especially since previous releases were disrupted by the government shutdown,” David said.