- Decision
- Raise
- Rate change
- 25 bps
- BI-rate
- 5.75%
Bank Indonesia raised the BI-Rate by 25 basis points to 5.75% on June 18, 2026, while lifting the Deposit Facility rate to 4.75% and the Lending Facility rate to 6.50%, saying the move was a further step to strengthen rupiah stabilisation amid still-high global uncertainty and a pre-emptive measure to keep 2026 and 2027 inflation within the government’s 2.5±1% target band, while maintaining pro-growth macroprudential and payments policies. To implement the stance, Bank Indonesia said it would intensify foreign-exchange intervention through offshore Non-Deliverable Forward (NDF), spot and Domestic Non-Deliverable Forward (DNDF) transactions, keep Sekuritas Rupiah Bank Indonesia (SRBI) rates across 6-, 9- and 12-month tenors aligned with the BI-Rate increase, continue a 10% hedging-swap incentive for foreign investors, and reopen repo auction windows at 3, 6, 9 and 12 months while ensuring base money growth remains above 10%. Consumer price inflation rose to 3.08% year on year in May from 2.42% in April, and Bank Indonesia forecast 2026 growth at 4.9%-5.7% as domestic demand stays solid, with bank credit growth accelerating to 11.51% year on year in May. On the external side, the April trade surplus narrowed to USD0.1 billion from USD3.3 billion in March, net capital inflows in the second quarter reached USD3.9 billion as of June 15 after a USD0.8 billion net outflow in the first quarter, and reserves stood at USD144.9 billion at end-May, equivalent to 5.6 months of imports. The rupiah strengthened to IDR17,730 per USD on June 17, up 0.76% from end-May, supported by Bank Indonesia’s stabilisation measures. Bank Indonesia said uncertainty from the Middle East war remains high despite the June 14 interim US-Iran deal, with 2026 global growth projected at 3.0% and inflation around 4.4%, and it signalled continued policy coordination and a stronger policy mix to preserve external resilience, stability and growth.
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.