Bank DBS Projects BI Rate to Rise to 6 Percent by 2026

Bank DBS Indonesia projects that the benchmark interest rate, or BI Rate, will rise to 6.0 percent by the end of 2026. According to DBS’s analysis, Bank Indonesia is predicted to increase the benchmark rate to 5.75 percent in the second quarter of 2026, before reaching 6.0 percent in the third and fourth quarters.

Head of Investment & Insurance Product at Bank DBS Indonesia, Djoko Soelistyo, assessed that the government is currently taking a position to maintain the stability of the rupiah exchange rate amid a strengthening US dollar. This stance is also in line with the predicted policy direction of the US central bank, which is expected to raise interest rates.

Nevertheless, Djoko acknowledged that excessively high interest rates will impact people’s purchasing power and retail banking. “The impact is that lending rates will automatically be carried upwards, which in turn will bring risks to banks in general as well,” he said during a media briefing in Jakarta on Thursday, 18 June 2026.

Therefore, Djoko stated that his institution hopes Bank Indonesia will continue to review the benchmark interest rate periodically. If purchasing power is depressed, the Indonesian economy will also be affected.

Consumer Banking Director of DBS Indonesia, Melfrida Gultom, confirmed that her institution always applies the principle of prudence in extending credit, in line with the BI Rate increase. She mentioned that DBS Indonesia routinely reviews its portfolio and conducts stress tests.

Melfrida said DBS will tighten its risk appetite criteria and adjust them to the targeted customer segments. “Because we also have to be careful with our NPL (Non-Performing Loan) level,” she said.

Bank Indonesia raised the benchmark interest rate, or BI-Rate, by 25 basis points to 5.75 percent during its June 2026 board of governors meeting. BI also decided to increase the deposit facility rate to 4.75 percent and the lending facility rate by 25 basis points to 6.5 percent.

“Based on a comprehensive assessment, the Bank Indonesia board of governors meeting on 17 and 18 June 2026 decided to raise the BI-Rate by 25 basis points to 5.75 percent,” said Perry during a press conference on Thursday, 18 June 2026. He stated that the rate hike is a further step to strengthen rupiah exchange rate stability amid heightened global uncertainty.