Jakarta. Bank Indonesia announced Thursday that they would keep the benchmark interest rate, also known as the BI Rate, at 6.25 percent.

The central bank also sets the deposit facility rate at 5.5 percent, while the lending facility rate stands at 7 percent. The freshly announced BI rate also aligns with analysts’ projections. 

Bank Indonesia's Governor Perry Warjiiyo said that the decision to keep the BI rate unchanged was consistent with the “pro-stability monetary policies”. And that is to take preemptive and forward-looking steps to make sure that inflation remains within the 1.5-3.5 percent range for 2024 and 2025.

“These policies are supported by the strengthening of monetary operations to boost the rupiah’s exchange rate stability and foreign capital inflows,” Perry told reporters in Jakarta.

According to Perry, Bank Indonesia will continue to make macro-prudential policies and ensure pro-growth financial systems. Flexible macro-prudential policies are necessary to boost bank’s financing for businesses and households. He added: “Policies related to payment systems will focus on strengthening its infrastructure, the structure of the payment system industry, as well as expanding access to a digital payment system.”

Bank Permata’s chief economist Josua Pardede already expected Bank Indonesia to maintain the 6.25 percent BI rate. LPEM FEB UI -- the economic think-tank of the University of Indonesia -- was also expecting the same.

“I believe Bank Indonesia will maintain the 6.25 percent BI Rate at the bank’s June board meeting. Because it is still consistent to anchor the inflation expectations and maintain the stability of the rupiah exchange rate,” Josua said.

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