Bank Indonesia Maintains Benchmark Interest Rate at 4.75 Per Cent
Bank Indonesia (BI) has decided to maintain its benchmark interest rate, or BI-Rate, at 4.75 per cent. The decision was made during the Monetary Policy Committee meeting held on 16-17 March 2026.
“Taking into account assessments of economic prospects and various global and domestic challenges, particularly the impact of the Middle East conflict, the Bank Indonesia Monetary Policy Committee meeting on 16-17 March 2026 decided to maintain the BI-Rate at 4.75 per cent,” BI Governor Perry said at a press conference on Tuesday, 17 March 2026.
The central bank also decided to maintain the deposit facility rate at 3.75 per cent and the lending facility rate at 5.50 per cent.
Perry explained that the decision was made to strengthen the stability of the rupiah’s exchange rate against the adverse global conditions caused by the Iran-Israel war, whilst maintaining the 2026-2027 inflation target of 2.5 per cent plus or minus 1 per cent. Perry stated that BI will continue to optimise various monetary policy instruments to strengthen external resilience against possible escalation of the Middle East conflict.
Perry noted that deteriorating global conditions due to the Iran-Israel war have impacted currency weakening and capital outflows from emerging market countries, including Indonesia. “The rupiah exchange rate on 16 March 2026 was recorded at Rp 16,985 per US dollar, weakening by 1.29 percentage points from the end of February 2026 in line with the depreciation of non-USD currencies,” Perry said.
The Institute for Economic and Social Research at the Faculty of Economics and Business, University of Indonesia (LPEM FEB UI), had previously assessed that BI should maintain the BI-Rate at 4.75 per cent. LPEM UI researcher Jahen Fachrul Rezki stated that the US-Iran war has created imported inflation risks through rising global energy prices.
LPEM also noted that foreign investors recorded net outflows of US$ 0.75 billion. “In these circumstances, Bank Indonesia has limited room to cut interest rates and we believe that Bank Indonesia should maintain the BI-Rate at 4.75 per cent to preserve rupiah stability and control inflation,” Jahen said in a Macroeconomic Analysis Series report, as quoted on Tuesday, 17 March 2026.