Bank Indonesia Raises BI Rate to 5.25 Percent

Jakarta — Bank Indonesia Governor Perry Warjiyo announced a 50 basis point increase in the BI Rate to 5.25 per cent, following the Bank Indonesia Board of Governors Meeting held on 19 and 20 May 2026. The decision also lifted the deposit facility rate by 50 basis points to 4.25 per cent and the lending facility rate by 50 basis points to 6 per cent.

‘Raising the BI Rate by 50 basis points to 5.25 per cent, the deposit facility rate by 50 bps to 4.25 per cent, and the lending facility rate by 50 bps to 6 per cent,’ Perry said in a teleconference on Wednesday, 20 May 2026.

He explained that the rationale behind the rate hike is to strengthen stabilisation of the rupiah in the face of the current global turmoil, primarily due to the war in the Middle East, and as a pre-emptive step to keep inflation in 2026 and 2027 within the government’s target range of 2.5 +/- 1 per cent.

He added that the policy is aligned with the 2026 monetary policy focus on stability to maintain Indonesia’s external resilience against global shocks. On the other hand, he continued, macroprudential policy will continue to be strengthened to support pro-growth development.

Furthermore, Perry stressed that BI will also continue to stimulate the economy through increased credit/financing to the real sector while maintaining financial-system stability. Additionally, the policy for the payments system will continue to be directed to support digital economy activities and financial inclusion, including strengthening acceptance of digital payments, reinforcing the structure of the payments system industry, and improving the reliability and resilience of payment-system infrastructure,’ he said.