Bank Indonesia kept the BI-Rate at 5.75%, while maintaining the Deposit Facility rate at 4.75% and the Lending Facility rate at 6.50%. The decision was paired with a broader policy package aimed at increasing foreign portfolio inflows, supporting rupiah stability, deepening the money and foreign exchange markets, and expanding liquidity while reducing liquidity segmentation in the money market and banking sector. The package sits alongside Bank Indonesia’s stated objective of keeping inflation within the government’s 2.5±1% target corridor in 2026 and 2027, while macroprudential and payment system policies remain geared toward supporting growth. On the monetary side, Bank Indonesia said it will continue to optimize intervention through offshore Non-Deliverable Forward transactions and domestic spot and Domestic Non-Deliverable Forward markets, manage money market rates in line with the policy rate, and keep primary money growth above 10%. To attract portfolio inflows, it raised the incentive for Swap Sell Hedging from 10% to 12.5%, extended incentives for DNDF Sell Hedging transactions by 15%, and added incentives linked to Local Currency Transactions with partner countries through a 10% additional premium for Swap Buy Hedging and a 10% reduction in premiums for DNDF Sell Hedging. To ease liquidity constraints, it expanded collateral eligible for repo transactions and the Bank Indonesia Sharia-Based Liquidity Facility to include bonds and sukuk issued by PT Sarana Multi Infrastruktur and PT Sarana Multigriya Finansial. It also revised the Macroprudential Liquidity Incentive Policy by increasing the maximum total incentive for banks to 6.0% of third-party funds from 5.5%, reducing the maximum allocation for priority-sector lending to 4.0% from 4.5%, and introducing a money market deepening allocation of up to 2.0% of third-party funds for banks meeting Bank Indonesia’s securities holding ratio. The expanded repo collateral framework is due to be implemented no later than the end of September 2026. The strengthened Macroprudential Liquidity Incentive Policy takes effect on 1 September 2026, while the strengthened Inclusive Macroprudential Financing Ratio policy takes effect on 1 October 2026 and widens eligible inclusive financing to suppliers, distributors and business partners of corporates, broadens interbank MSME lending cooperation, and strengthens contract-based interbank transfer arrangements. Bank Indonesia also said it will expand digital payment acceptance, including QRIS cross-border linkages with priority partner countries, and continue restructuring payment system industry activities, products and partnerships in line with its risk management requirements.
Bank of Indonesia2026-07-22
Bank Indonesia holds BI-Rate at 5.75%, expands FX and liquidity incentives to attract portfolio inflows
Bank Indonesia left the BI-Rate at 5.75%, with the Deposit Facility at 4.75% and the Lending Facility at 6.50%, and paired the decision with measures to attract foreign portfolio inflows and support the rupiah. The package raises hedging incentives, broadens eligible repo collateral, and revises macroprudential liquidity incentives for banks. Key liquidity and financing changes will take effect from September and October 2026.