Analyst Predicts Year-End Interest Rate Hike of 200 Basis Points, BI Urged to Prepare for Global Pressure

Market watcher Ibrahim Assuaibi has endorsed Bank Indonesia’s (BI) decision to raise the benchmark interest rate to 5.50 per cent, describing the move as well-timed to ease pressure on the rupiah, which has been battered by global turmoil, foreign capital outflows, and rising domestic demand for foreign currency in recent weeks. He assessed that the momentum for the rate hike was ideal because global geopolitical tensions had begun to show signs of easing. “Today, Bank Indonesia announced a 25-basis-point interest rate increase to 5.50 per cent. The momentum is very good because geopolitical tensions have somewhat eased following (Donald) Trump’s statement about no mutual attacks between Israel and Iran,” Ibrahim said in an official statement on Tuesday, 9 June 2026. According to Ibrahim, this condition provided room for BI to send a strong signal to the market that Indonesia is serious about maintaining exchange rate stability and controlling inflation amidst global uncertainty. “This is the best momentum, and in my view, Bank Indonesia’s timing in making a policy to raise the interest rate is very precise,” he remarked. He explained that the primary objective of the rate hike was to maintain rupiah stability while anticipating the risk of rising inflation expected to stem from increasing prices of imported goods. “This interest rate increase aims to stabilise the rupiah and keep inflation in check,” he asserted. “Because we see that inflation is likely to rise every month due to the impact of higher prices for imported goods.” While praising the central bank’s move, Ibrahim cautioned that the burden of safeguarding economic stability cannot be borne by BI alone. He said the government must issue aligned policies to ensure that efforts to defend the rupiah yield stronger and more sustainable results. “This Bank Indonesia policy is quite good, raising the interest rate,” he stated. “Now, it depends on the government and its policies to work together with Bank Indonesia to stabilise the rupiah.”