The central bank also lowered its Deposit Facility (DF) rate by 25 bps to 2.75% and Lending Facility (LF) rate by 25 bps to 4.25%.
"The decision is consistent with projected low inflation and maintained exchange rate stability as well as follow-up efforts to support national economic recovery momentum," said BI Governor Perry Warjiyo in a press release on Thursday.
In addition, BI has also instituted policy measures in synergy with Financial System Stability Committee policy, as contain in the Integrated Policy Package to Increase Corporate Financing and Accelerate the Economic Recovery.
Some of the measures are maintaining rupiah exchange rate stabilisation policy in line with the currency's fundamental value and market mechanisms, strengthening the monetary operations strategy to reinforce the accommodative monetary policy stance; relaxing down payment requirements on automotive loans/financing to minimum 0% for all new motor vehicles to stimulate credit growth in the automotive sector, and relaxing the Loan/Financing-to-Value (LTV/FTV) ratio on housing loans/financing to maximum 100% on all residential property (landed houses, apartments and shop houses/office houses) for banks meeting specific NPL/NPF criteria.
Moving forward, BI will continue to direct all policy instruments towards supporting the national economic recovery, while controlling inflation and maintaining rupiah exchange rate stability and financial system stability.
Furthermore, policy coordination with the Indonesian Government and Financial System Stability Committee will constantly be strengthened, including implementation of the integrated policy package with a focus on efforts to overcome supply and demand-side constraints in terms of bank lending to the business community and priority sectors to support economic growth and national economic recovery.