Indonesia's central bank unexpectedly kept its key interest rate unchanged on Wednesday after three consecutive reductions as policymakers assess the impact of the previous easing.
The Bank Indonesia board, led by Governor Perry Warjiyo, decided to hold the BI rate at 4.75 percent. The bank was expected to cut the rate by 25 basis points.
The bank had lowered the benchmark rate by 125 basis points thus far this year. The current level of 4.75 percent is the lowest since October 2022. The deposit facility rate was retained at 3.75 percent and the lending facility rate at 5.50 percent.
The bank said the decision was consistent with the low inflation forecast for this year and next, and also with the aim to maintain the stability of the rupiah exchange rate amid high global uncertainty.
In September, the Asian country's inflation was 2.65 percent, which was well within the central bank's target range of 1.5 percent and 3.5 percent.
The bank forecast economic growth to be slightly above the midpoint of the 4.6-5.4 percent range this year and higher growth in 2026.
Earlier, ING economists said BI would look for some clarity on fiscal expansion before making the next rate move.
With softer inflation prints helping real policy rates stay high, the BI is expected to deliver another 50bp of rate cuts by the first quarter of 2026, they said.
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December 19, 2025 15:10 ET U.S. inflation data and interest rate decisions by major central banks were the highlights of this busy week for economics news flow. Employment data and survey results on the housing markets also gained attention in the U.S. In Europe, the European Central Bank and Bank of England announced their policy decisions and macroeconomic projections.