BI Holds Benchmark Rate at 5.75% in July 2026 RDG

Bank Indonesia (BI) has decided to hold its benchmark interest rate, the BI Rate, at 5.75 per cent following the July 2026 Board of Governors Meeting (RDG). The decision was taken to maintain the stability of the rupiah exchange rate amid rising global uncertainty and to ensure inflation remains within the 2.5±1 per cent target range. “The Bank Indonesia Board of Governors Meeting on 21 and 22 July 2026 decided to maintain the BI Rate at 5.75 per cent, the deposit facility rate at 4.75 per cent, and the lending facility rate at 6.50 per cent,” said BI Governor Perry Warjiyo during a virtual press conference for the July 2026 RDG on Wednesday (22/7/2026). Perry stated that BI is expanding its incentive policies and a number of other measures to increase foreign portfolio investment inflows and strengthen rupiah stability, accelerate the deepening of the Money and Foreign Exchange Market (PUVA), and boost liquidity and address liquidity segmentation in the money and banking markets. “The BI Rate decision and other policies are an integrated part of BI’s policy mix to strengthen rupiah exchange rate stability amid high global uncertainty and maintain inflation within the 2.5 plus minus 1 per cent target range, or pro-stability,” he explained. Meanwhile, he continued, macroprudential and payment system policies remain directed at encouraging economic growth (pro-growth). Loose macroprudential policy is being strengthened, among other things, to encourage credit to the real sector to maintain financial system stability. BI is also consistently expanding digital payment acceptance and strengthening payment system infrastructure. BI’s interest rate policy has recently tended to be hawkish. In the first four months of 2026, BI held the benchmark rate at 4.75 per cent. Then, amid geoeconomic and geopolitical dynamics, the BI Rate was raised by 50 basis points to 5.25 per cent in May 2026. BI also abruptly decided to raise the BI Rate by 25 basis points to 5.50 per cent on 9 June 2026 following a weekly RDG. BI again raised the benchmark rate at the June 2026 RDG by 25 basis points to 5.75 per cent. BI’s policy shows a trend of high interest rates this year, contrasting with the policy in 2025. Throughout 2025, BI cut the benchmark rate five times, each by 25 basis points, in January, May, July, August, and September. From an initial position of 6 per cent, the BI Rate fell a total of 125 basis points to reach 4.75 per cent by the end of 2025.