Bank Indonesia held the BI-Rate at 5.75% to stabilise the rupiah amid strong external pressures and keep inflation within target, while maintaining growth-supportive macroprudential policies, following a 25-basis-point increase to that level in June. The central bank raised its Deposit Facility rate to 5.00%, announced phased reductions in rupiah reserve requirements effective 1 November and 1 December 2026 to bolster liquidity, and strengthened domestic non-deliverable forward hedging incentives to attract foreign capital. September consumer price inflation stood at 3.28% year on year, within the 2.5±1% target for 2026 and 2027, as food inflation increased despite easing core and administered-price inflation. Bank Indonesia projected economic growth of 4.9–5.7% in 2026, supported by government stimulus and improving economic expectations, while bank lending remained strong. The rupiah weakened against the US dollar between end-September and 20 October amid geopolitical tensions, tighter US monetary policy and foreign equity investor sentiment. Escalating conflict in the Middle East kept oil and commodity prices elevated, with global monetary policy expected to remain tight for longer. Bank Indonesia signalled it would optimise its monetary instruments and make necessary adjustments to strengthen external resilience and preserve economic stability.
Bank Indonesia Holds BI-Rate at 5.75%
Bank Indonesia held the BI-Rate at 5.75% to stabilise the rupiah amid external pressures and keep inflation within target. It raised the Deposit Facility rate to 5.00%, announced phased reductions in rupiah reserve requirements effective 1 November and 1 December 2026, and strengthened domestic non-deliverable forward hedging incentives to attract foreign capital.