Bank Indonesia Hikes Rate Again to 5.75 pct to Save Rupiah

Bank Indonesia Hikes Rate Again to 5.75 pct to Save Rupiah

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Anastasya Lavenia Yudi

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Dewi Elvia Muthiariny

Kamis, 18 Juni 2026 15:23 WIB

TEMPO.CO, Jakarta - Bank Indonesia (BI) has raised its benchmark interest rate, or the BI-Rate, by 25 basis points to 5.75 percent. The decision was finalized during the central bank’s Board of Governors meeting held on June 17-18, 2026.

“Based on a comprehensive assessment, the Bank Indonesia Board of Governors meeting on June 17 and 18, 2026, has decided to increase the BI-Rate by 25 basis points to 5.75 percent,” BI Governor Perry Warjiyo announced during a press conference at the BI headquarters in Jakarta on Thursday, June 18, 2026.

Alongside this move, BI also raised the deposit facility rate to 4.75 percent and the lending facility rate to 6.5 percent.

Perry explained that the rate hike is a measure to further anchor the stability of the rupiah amid heightened global uncertainty. The move is also designed to keep inflation within the target corridor of 2.5 percent, plus or minus 1 percent, for the 2026-2027 period.

In its previous Board of Governors meeting, the central bank had lifted the benchmark rate by 50 basis points to 5.25 percent. Less than a month later, BI bumped the BI-Rate again to 5.50 percent during a weekly board meeting on Tuesday, June 9, 2026.

Prior to the announcement, the Institute for Economic and Social Research at the University of Indonesia’s Faculty of Economics and Business (LPEM FEB UI) had urged BI to hold the benchmark rate steady at 5.5 percent. In its latest analysis, LPEM pointed out that headline inflation had climbed to 3.08 percent year-on-year in May 2026, up from 2.42 percent in April 2026.

LPEM also noted that foreign exchange reserves had shrunk by US$11.6 billion over the last five months, a sign of continuous intervention in the currency market to support the rupiah.

“Given the gradual policy tightening underway since May, ongoing foreign exchange interventions, and the need to assess the impact of recent measures, we believe Bank Indonesia should maintain its policy interest rate at 5.50 percent for this week’s meeting,” LPEM macroeconomic researcher Teuku Riefky noted in the institute’s Macroeconomic Analysis report, published on Thursday, June 18, 2026.

Read: Indonesia’s Rupiah Falls to Rp17,856 Against U.S. Dollar

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