- Decision
- Maintain
- Rate change
- 0 bps
- BI-rate
- 4.75%
Bank Indonesia (BI) left the BI-Rate unchanged at 4.75% together with the 3.75% Deposit Facility and 5.50% Lending Facility, saying the stance reinforces pro-market monetary operations and intensified FX intervention to shield the rupiah from the deteriorating global backdrop stemming from the Middle-East conflict and to keep 2026-27 inflation within the 2.5 ± 1% target range. After a cumulative 150 bp of easing between September 2024 and September 2025, the central bank continues to steer liquidity by growing base money above 10% and using spot, DNDF and offshore NDF interventions, while maintaining attractive domestic yields through its instrument corridor and secondary-market SBN purchases. Consumer price inflation slowed to 3.48% y/y in March from 4.76% in February, and BI still sees GDP expanding 4.9–5.7% in 2026, supported by bank credit that rose 9.49% y/y in March. Foreign reserves stood at USD148.2 bn (about six months of imports) at end-March; the rupiah traded at Rp17,140 per USD on 21 April, 0.87% weaker month-to-date, while the current-account deficit is projected in a narrow –1.3% to –0.5% of GDP range for 2026. Globally, BI cited a cut in the 2026 world growth forecast to 3.0%, higher oil prices and global inflation of 4.2%, delayed Fed easing and rising UST yields that have spurred flight-to-safety flows and a stronger DXY. BI reiterated it “is prepared to strengthen monetary policy further” if needed to stabilise the rupiah and secure its inflation mandate.
Rate evolution
From June 2025 to September 2026, Bank Indonesia cut the BI-Rate by 75 basis points from 5.50% to 4.75% between July and September 2025, then held it at 4.75% in October 2025 and for the following six meetings before shifting into tightening, lifting the rate to 5.50% in May 2026 and 5.75% in June 2026. The mid-2025 cuts and the October 2025 pause reflected inflation forecasts for 2025 and 2026 that remained low within the 2.5±1% target, efforts to maintain rupiah stability in the face of still-high global uncertainty, and support for growth as domestic demand and credit remained soft. At the October meeting, Bank Indonesia said it would continue to assess the transmission of the easing already delivered, the growth and inflation outlook, and rupiah stability when considering room for further BI-Rate cuts, while strengthening macroprudential policy to push lending rates lower, raise liquidity and support credit growth.
Through late 2025 and early 2026, the emphasis shifted from room for further easing to external resilience as capital flows turned more volatile, the rupiah weakened and Bank Indonesia pressed banks to pass earlier easing through to lending rates. The policy turn then hardened as turmoil from the Middle East war, higher oil prices, a stronger dollar, high US Treasury yields and foreign exchange pressures prompted Bank Indonesia to prioritise stability, with April signalling readiness to tighten further if needed, May’s increase framed as pre-emptive, and June’s further 25-basis-point increase aimed at strengthening rupiah stabilisation and keeping inflation within the 2.5±1% target in 2026 and 2027. Bank Indonesia held the BI-Rate at 5.75% from July through September as global volatility persisted, with the September decision focused on rupiah stability amid strong external pressures, the inflation target and sustainable growth, while strengthening incentives to attract foreign capital inflows and accelerating money and foreign exchange market deepening.