Bank Indonesia held the BI-Rate at 5.75%, the Deposit Facility rate at 4.75% and the Lending Facility rate at 6.50%. The decision seeks to stabilize the rupiah amid strong external headwinds, keep inflation within the 2.5% plus or minus 1 percentage point target range in 2026 and 2027, and support economic growth. The central bank increased incentives for hedging foreign funding from portfolio inflows, foreign bank loans and foreign direct investment. Premium reductions for conventional swap buy hedging will rise from 12.5% across all tenors to 15% for three months, 20% for six months and 25% for 12 months. For Domestic Non-Deliverable Forward hedging, the reduction will increase from 15% to 25% for six months and 30% for 12 months. Bank Indonesia also maintained local currency transaction incentives and continued preparations for a strengthened Macroprudential Inclusive Financing Ratio policy, effective Oct. 1, 2026, to encourage financing for inclusive and sustainable sectors. The rupiah stood at IDR17,855 per U.S. dollar on Sept. 22, down 0.78% from the end of August, while annual inflation rose to 3.19% in August but remained within the target range. Bank Indonesia maintained its 2026 economic growth forecast of 4.9% to 5.7% and its bank credit growth forecast of 8% to 12%.
2026-09-23Bank of Indonesia
Bank Indonesia holds policy rate at 5.75% and expands foreign exchange hedging incentives
Bank Indonesia held the BI-Rate at 5.75% and kept its facility rates unchanged to support the rupiah and contain inflation. It increased premium reductions for swap and Domestic Non-Deliverable Forward hedging backed by eligible foreign funding. A strengthened inclusive financing ratio policy will take effect on Oct. 1, 2026.