Economic Roundup: Bank Indonesia Cuts Rate to 5.25 Percent, US Reciprocal Tariff on Indonesian Products Drops to 19 Percent
Jakarta (ANTARA) - Bank Indonesia (BI) cutting the BI-Rate to 5.25 per cent and the United States reciprocal tariff on Indonesian products falling to 19 per cent were among the notable economic stories on Wednesday (16/7/2025). The following is a summary:
1. BI: Rate Cut Consistent with Low Inflation Forecast
Bank Indonesia said its decision to cut the benchmark BI-Rate by 25 basis points to 5.25 per cent was in line with increasingly low inflation forecasts for 2025 and 2026, within the target of 2.5 per cent plus or minus 1 per cent.
"Going forward, Bank Indonesia will continue to assess room for further rate cuts to boost economic growth whilst maintaining rupiah exchange rate stability and achieving inflation targets in accordance with developments in the global and domestic economy," said BI Governor Perry Warjiyo in Jakarta on Wednesday.
2. Trump Eyes Indonesian Copper, BKPM Seeks to Ensure Exports Are Downstream Products
The Ministry of Investment and Downstreaming/Investment Coordinating Board (BKPM) and related agencies are working to ensure that copper products sold to the United States are the result of value-added processing or downstreaming carried out domestically.
This was conveyed by Rizwan Aryadi Ramdhan, Director of Mineral and Coal Downstreaming at the Ministry of Investment and Downstreaming/BKPM, in Jakarta on Wednesday, in response to US President Donald Trump's statement that Indonesia possesses high-quality copper, made when announcing the reduction of reciprocal tariffs from 32 per cent to 19 per cent.
3. BKPM: Second Quarter 2025 Investment Realisation Reaches Rp475 Trillion
Deputy Minister of Investment and Downstreaming/Deputy Head of BKPM Todotua Pasaribu announced that investment realisation in the second quarter of 2025 reached Rp475 trillion, higher than the first quarter figure of Rp465 trillion.
"In the first quarter we were already able to release a figure of Rp465 trillion, and in the second quarter we have reached Rp475 trillion," said Todotua at the Pertamina Investor Day in Jakarta on Wednesday.
4. Trade Minister: US 19 Per Cent Tariff Agreement Includes Investment
Trade Minister Budi Santoso said the reciprocal tariff agreement between Indonesia and the United States is not merely about market access demands but will also bring new investment from the US.
"Actually, America is not solely about market access that we demand. Because it turns out they will also be making investments," said Budi during a working meeting with House of Representatives Commission VI in Jakarta on Wednesday.
5. US Tariff Drop to 19 Per Cent Will Boost Indonesian Competitiveness, Says Industry Minister
Industry Minister Agus Gumiwang Kartasasmita stated that the US reciprocal tariff agreement, reduced to 19 per cent from 32 per cent, is believed to be capable of boosting the competitiveness of domestic manufactured products in export markets.
"America's decision to lower or adjust tariffs on a number of Indonesian manufactured export commodities will enhance the competitiveness of our products in their market. This will have a direct impact on industry, particularly in terms of utilisation, job creation, and strengthening of the national industrial structure," said Agus in Jakarta on Wednesday.
1. BI: Rate Cut Consistent with Low Inflation Forecast
Bank Indonesia said its decision to cut the benchmark BI-Rate by 25 basis points to 5.25 per cent was in line with increasingly low inflation forecasts for 2025 and 2026, within the target of 2.5 per cent plus or minus 1 per cent.
"Going forward, Bank Indonesia will continue to assess room for further rate cuts to boost economic growth whilst maintaining rupiah exchange rate stability and achieving inflation targets in accordance with developments in the global and domestic economy," said BI Governor Perry Warjiyo in Jakarta on Wednesday.
2. Trump Eyes Indonesian Copper, BKPM Seeks to Ensure Exports Are Downstream Products
The Ministry of Investment and Downstreaming/Investment Coordinating Board (BKPM) and related agencies are working to ensure that copper products sold to the United States are the result of value-added processing or downstreaming carried out domestically.
This was conveyed by Rizwan Aryadi Ramdhan, Director of Mineral and Coal Downstreaming at the Ministry of Investment and Downstreaming/BKPM, in Jakarta on Wednesday, in response to US President Donald Trump's statement that Indonesia possesses high-quality copper, made when announcing the reduction of reciprocal tariffs from 32 per cent to 19 per cent.
3. BKPM: Second Quarter 2025 Investment Realisation Reaches Rp475 Trillion
Deputy Minister of Investment and Downstreaming/Deputy Head of BKPM Todotua Pasaribu announced that investment realisation in the second quarter of 2025 reached Rp475 trillion, higher than the first quarter figure of Rp465 trillion.
"In the first quarter we were already able to release a figure of Rp465 trillion, and in the second quarter we have reached Rp475 trillion," said Todotua at the Pertamina Investor Day in Jakarta on Wednesday.
4. Trade Minister: US 19 Per Cent Tariff Agreement Includes Investment
Trade Minister Budi Santoso said the reciprocal tariff agreement between Indonesia and the United States is not merely about market access demands but will also bring new investment from the US.
"Actually, America is not solely about market access that we demand. Because it turns out they will also be making investments," said Budi during a working meeting with House of Representatives Commission VI in Jakarta on Wednesday.
5. US Tariff Drop to 19 Per Cent Will Boost Indonesian Competitiveness, Says Industry Minister
Industry Minister Agus Gumiwang Kartasasmita stated that the US reciprocal tariff agreement, reduced to 19 per cent from 32 per cent, is believed to be capable of boosting the competitiveness of domestic manufactured products in export markets.
"America's decision to lower or adjust tariffs on a number of Indonesian manufactured export commodities will enhance the competitiveness of our products in their market. This will have a direct impact on industry, particularly in terms of utilisation, job creation, and strengthening of the national industrial structure," said Agus in Jakarta on Wednesday.