Although BI maintains the benchmark interest rate at 5.75 percent,\nstability continues to be reinforced, among other things, through the\nexpansion of incentive policies.<\/p>\n
TANGKAPAN LAYAR<\/p>\n
By Agustinus Yoga Primantoro<\/p>\n
22 Jul 2026 15:46 WIB \u00b7 Ekonomi & Bisnis<\/p>\n
JAKARTA, KOMPAS \u2013 Bank Indonesia or BI has finally decided to\nmaintain its benchmark interest rate at 5.75 percent. Instead of\nmaintaining stability through policy interest rates, BI has chosen to\nstrengthen incentives to enhance the flow of foreign capital.<\/p>\n
The decision was taken after BI held its monthly Board of Governors\nMeeting (RDG) on July 21-22, 2026. In line with the benchmark interest\nrate, BI also maintained the deposit facility and lending facility\ninterest rates by 25 basis points (bps), to 4.75 percent and 6.5\npercent, respectively.<\/p>\n
Bank Indonesia Governor Perry Warjiyo stated that global uncertainty\nhas increased again due to the rising intensity of the conflict between\nthe United States and Iran in early July 2026. This situation has\nresulted in a shift of capital flows from developing countries to the US\nfinancial markets.<\/p>\n
\u201cThe uncertainty in the global economy and financial markets that has\nrisen again necessitates the strengthening of responses and synergy\nbetween fiscal and monetary policies to enhance external resilience,\nmaintain stability, and encourage domestic economic growth,\u201d he stated\nduring a press conference held online on Wednesday (22\/7\/2026).<\/p>\n
Therefore, BI is expanding incentive policies and several other\nmeasures to enhance the inflow of foreign portfolio investment and\nstrengthen the stability of the rupiah exchange rate, accelerate the\ndeepening of the money market and foreign exchange market (PUVA), as\nwell as improve liquidity and reduce liquidity segmentation in the money\nand banking markets.<\/p>\n
In this regard, BI increased the incentive for Swap Selling Hedging\n(Swap Buying Hedging to BI) from 10 percent to 12.5 percent. This\nincentive expansion was also extended to 15 percent for Domestic\nNon-Deliverable Forward (DNDF) Selling Hedging.<\/p>\n
Furthermore, the provision of incentives is also aimed at increasing\nlocal currency-based transactions (LCT) with partner countries, through\nthe addition of Hedging Swap Buy premiums and a reduction in Hedging\nDNDF Sell premiums, both of which are 10 percent.<\/p>\n
The decision to maintain the benchmark interest rate and the\nexpansion of incentive policies is an integrated part of BI\u2019s policy mix\nthat remains consistent in further strengthening the stability of the\nrupiah exchange rate amid ongoing high global uncertainty.<\/p>\n
Bank Indonesia recorded that foreign portfolio investment in the\nsecond quarter of 2026 showed a net purchase of 8.5 billion US dollars,\nprimarily from the government securities market and Bank Indonesia\u2019s\nRupiah Securities (SRBI) instruments. The influx of foreign portfolio\ninvestment continued into the third quarter of 2026 (up to July 20,\n2026), particularly from government securities, which recorded a net\npurchase of 0.1 billion US dollars.<\/p>\n
As a result, the exchange rate of the rupiah tended to strengthen by\napproximately 1.06 percent over the past week to a level of Rp 17,885\nper US dollar on July 21, 2026. This strengthening occurred after the\nrupiah had weakened since the end of June 2026 due to the renewed\nescalation of conflict in the Middle East and the strengthening of\nmarket expectations regarding an increase in US interest rates.<\/p>\n
Perry explained that the decision to maintain the benchmark interest\nrate and the expansion of incentive policies is an integrated part of\nBI\u2019s policy mix, which remains consistent in further strengthening the\nstability of the rupiah exchange rate amid ongoing high global\nuncertainty.<\/p>\n
In addition, monetary policy remains directed at maintaining\nstability (pro-stability), in order to keep the inflation rate anchored\nwithin the target range of 1.5-2.5 percent set by the government in 2026\nand 2027.<\/p>\n
\u201cMeanwhile, macroprudential and payment system policies remain geared\ntowards promoting pro-growth,\u201d he said.<\/p>\n
Previously, economist and researcher at the Institute for Economic\nand Community Research of the Faculty of Economics and Business,\nUniversity of Indonesia (LPEM FEB UI), Teuku Riefky, argued that Bank\nIndonesia should indeed maintain its benchmark interest rate while\nevaluating the impact of the latest policy tightening on the exchange\nrate, inflation, and domestic economic activity.<\/p>\n
\u201cFurther monetary tightening may only provide limited additional\nsupport for the Rupiah, while imposing greater costs on domestic credit,\ninvestment, and economic activity,\u201d he said.<\/p>\n
Since May 2026, BI has cumulatively raised its policy interest rate\nby 100 basis points to a level of 5.75 percent. This policy aims to\nstrengthen the stability of the rupiah and enhance the attractiveness of\nfinancial assets denominated in rupiah amid increasing global\nuncertainty.<\/p>\n
However, it appears that the rupiah still tends to weaken, despite\nhigher interest rates and foreign exchange interventions. According to\nRiefky, this indicates that monetary measures have contained volatility,\nbut have not reversed the underlying pressures.<\/p>\n
\u201cThe demand for US dollars from global investors, the foreign\nexchange needs of companies, as well as concerns regarding fiscal\ncommitments and financing needs have offset some of the benefits from\nthe wider interest rate differential,\u201d he stated.<\/p>\n
On the other hand, inflation is expected to remain within the Bank\nIndonesia target range, although the risk of an increase is rising\nfollowing the renewed geopolitical tensions in the Middle East, which\ncould potentially raise global energy prices and contribute to import\ninflation.<\/p>\n
However, he continued, this inflationary pressure is largely driven\nby the supply side. Therefore, the risk is likely to be unable to be\neffectively addressed solely through additional monetary tightening.<\/p>\n
Writer:<\/p>\n
Agustinus Yoga PrimantoroEditor:<\/p>\n
FX Laksana Agung Saputra<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/strengthening-incentives-bi-maintains-interest-rate-at-5-75-percent-1784757009", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }