Analyst sees rebound potential for IHSG after BI rate hike

Jakarta (ANTARA) – Market observer Reydi Octa said that if the rupiah stabilises and foreign selling pressure eases after the BI rate hike, the potential for a technical rebound in the Jakarta Composite Index (IHSG) remains open, especially for big-cap banking stocks. For the near term, he projected that the IHSG could continue to move volatilily with a bias toward consolidation. “If the rupiah stabilises and foreign selling pressure eases after the rate hike, the technical rebound opportunity remains open, especially in big-cap banking stocks,” he said when contacted by Antara in Jakarta on Wednesday. Macro-wise, he explained that the BI rate hike by Bank Indonesia (BI) will help maintain rupiah stability, inflation, and foreign capital flows. On the other hand, he cautioned that a 50 basis point increase to 5.25 percent will be negative sentiment in the short term for Indonesia’s stock market, because it raises the cost of funds and dampens investor appetite for risk assets. “Sectors that are sensitive to interest rates such as property, technology, and consumer non-durables are likely to be more pressured,” he said. From the foreign investor perspective, according to him, the BI rate rise could be seen positively in maintaining rupiah stability and policy credibility. “The market sees BI as aggressive in responding to external pressures and currency volatility, thereby helping to curb further capital outflows,” he added. Trading frequency reached 2,189,469 transactions with 35.97 billion shares traded valued at Rp18.64 trillion. A total of 166 shares rose, 539 fell, and 111 were unchanged. In the May 2026 Board of Governors’ Meeting today, BI decided to raise the BI Rate by 50 basis points to 5.25 percent. The deposit facility rate was raised by 50 basis points to 4.25 percent, as did the lending facility rate to 6.0 percent. “This increase is a further step to strengthen the stability of the rupiah against the impact of heightened global volatility due to the Middle East conflict, and as a pre-emptive move to keep inflation in 2026 and 2027 within the government’s target of 2.5 plus/minus 1 percent,” Governor Perry Warjiyo said. He added that the decision aligns with the 2026 policy focus on stability to bolster Indonesia’s external resilience to global shocks.