{ "success": true, "data": { "id": 1748947, "msgid": "rupiah-no-longer-on-the-mend-bi-rate-expected-to-rise-starting-tomorrow-1779546224", "date": "2026-05-19 15:20:34", "title": "Rupiah No Longer on the Mend; BI Rate Expected to Rise Starting Tomorrow", "author": "", "source": "CNBC", "tags": "", "topic": "Economy", "summary": "Markets expect BI to raise the policy rate for the first time in two years, with most projections pointing to a 25 basis point hike to 5.00% at the May RDG. The rupiah has continued to weaken amid global tensions and high energy prices, prompting talk of a more decisive central-bank response.", "content": "

Jakarta, CNBC Indonesia - Ahead of Bank Indonesia\u2019s Board of\nGovernors\u2019 Meeting (RDG BI), market participants are beginning to see\nthe possibility of an increase in the policy rate at this meeting. Bank\nIndonesia is holding the May RDG today, Tuesday (19 May 2026), with the\ndecision to be announced tomorrow, Wednesday (20 May 2026). CNBC\nIndonesia\u2019s polling results show market views this time are no longer\nunanimous as in previous meetings. Of the 15 institutions participating,\nnine expect Bank Indonesia to raise the BI Rate by 25 basis points to\n5.00%. The remaining six expect BI to keep rates at 4.75%. The majority\nof market participants now view a rate hike as a scenario at this RDG,\nas pressures on the rupiah exchange rate intensify and external risks\nrise. In the last RDG in April 2026, BI again decided to hold the BI\nRate at 4.75%, with the Deposit Facility rate at 3.75% and the Lending\nFacility at 5.50%. That decision marked the seventh consecutive time BI\nhas held its policy rate. If the RDG outcome aligns with the majority\nconsensus, this would be BI\u2019s first rate increase in two years. The last\ntime BI raised rates was in April 2024, when the central bank lifted the\nBI Rate by 25 basis points from 6.00% to 6.25%. However, market\nconditions have changed. Pressure on the rupiah has deepened, while\nexternal turmoil from the US\u2013Iran conflict continues to create global\nuncertainty and keep world energy prices at high levels. The rupiah\nexchange rate has continued to hit new all-time lows and markets are\npricing in a more decisive policy response from the central bank. One\nanalyst predicting a rate rise is NH Korindo Sekuritas analyst Ezaridho\nIbnutama. He said the continued weakness of the rupiah is the main\nreason BI needs to act promptly. \u2018A 25 basis point rise. The rupiah is\nalready weak, forming new all-time highs every day,\u2019 Ezaridho told CNBC\nIndonesia. Ezaridho added that the rupiah pressure could be accompanied\nby continued capital outflows, from both foreign and domestic investors.\n\u2018Foreign and domestic capital outflow can be expected to continue,\u2019 he\nsaid. A similar view was expressed by Hosianna Situmorang, economist at\nBank Danamon Indonesia. He believes the urgency of a rate hike this\nmonth is increasingly evident, especially as the rupiah\u2019s deeper\ndepreciation remains unchecked despite BI\u2019s tightening of monetary\ninstruments. \u2018Honestly, we see an urgency for BI to raise rates this\nmonth,\u2019 Hosianna said. Note that, citing Refinitiv data, in trading on\nTuesday (19 May 2026) at 13:18 WIB, the rupiah had weakened 0.51% to\nRp17,730 per US.T<\/em>h<\/em>i<\/em>s<\/em>f<\/em>o<\/em>l<\/em>l<\/em>o<\/em>w<\/em>e<\/em>d<\/em>s<\/em>h<\/em>a<\/em>r<\/em>p<\/em>d<\/em>e<\/em>c<\/em>l<\/em>i<\/em>n<\/em>e<\/em>s<\/em>i<\/em>n<\/em>t<\/em>h<\/em>e<\/em>p<\/em>r<\/em>i<\/em>o<\/em>r<\/em>s<\/em>e<\/em>s<\/em>s<\/em>i<\/em>o<\/em>n<\/em>,\u2006w<\/em>h<\/em>e<\/em>n<\/em>t<\/em>h<\/em>e<\/em>r<\/em>u<\/em>p<\/em>i<\/em>a<\/em>h<\/em>c<\/em>l<\/em>o<\/em>s<\/em>e<\/em>d<\/em>d<\/em>o<\/em>w<\/em>n<\/em>1.03<\/span>.\nThus, the rupiah remains in a weakening trend, often breaching new\npsychological levels. In May alone, the rupiah has depreciated 2.46%.\nYear to date, the rupiah has weakened 6.36% against the US dollar.\nJuniman, Chief Economist at Maybank Indonesia, who also expects BI to\nraise the BI Rate by 25 basis points at this meeting, said: \u2018We expect\nBank Indonesia to raise the BI Rate by 25 basis points to 5.00% in May\n2026. This is driven by ongoing pressure on the rupiah from global\nfinancial market uncertainty and the impact of rising geopolitical\ntensions, namely the Iran-Israel-US conflict,\u2019 he told CNBC Indonesia.\nHe added that higher capital outflows from domestic financial markets\nand still-high global oil prices are also factors pushing BI to consider\na rate increase. Nevertheless, not all market participants see BI\nneeding to raise rates soon. Senior Economist at KB Valbury Sekuritas,\nFikri Permana, expects BI to keep its policy rate at 4.75%. He said BI\u2019s\nconsiderations extend beyond rupiah stability and inflation, to its\nmandate to maintain domestic economic growth. Therefore, the option to\nhold rates remains open. These differing views make the May RDG one of\nthe BI meetings most awaited by markets this year. Where in previous\nmonths the market consensus tended to point toward holding rates, this\ntime the majority is starting to see a need for monetary tightening to\nmaintain rupiah stability.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/rupiah-no-longer-on-the-mend-bi-rate-expected-to-rise-starting-tomorrow-1779546224", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }