BI Raises Interest Rate, Rupiah Strengthens to Rp 17,650 per U.S. Dollar

Jakarta — The rupiah closed stronger in the spot market on Wednesday, 20 May 2026. The rupiah rose 55 points or 0.31% to Rp 17,650 per U.S. dollar. Earlier in the session the rupiah had come under pressure, trading at Rp 17,738 per dollar, down 0.18% from the previous close of Rp 17,706 per dollar.

The rupiah gained after Bank Indonesia lifted its benchmark policy rate by 50 basis points to 5.25% at the May 2026 meeting of the BI Board of Governors. Currency analysts such as Ibrahim Assuaibi said the decision was aimed at strengthening rupiah stability amid worsening global conditions, particularly the war in the Middle East. BI is also aiming to keep inflation for 2026 to 2027 within the 2.5% ± 1% target band.

‘This decision is intended to strengthen rupiah stability against the impact of deteriorating global conditions due to the Middle East war, as well as to maintain the 2026-2027 inflation target,’ Ibrahim told reporters on Wednesday afternoon.

Positive sentiment also flowed from President Prabowo Subianto’s remarks in the plenary session of the Indonesian House of Representatives. Prabowo said economic growth in Indonesia would be in the range of 5.8% to 6.5% in 2027. He noted that the average growth over the past seven years has stood at around 5%. Nevertheless, he acknowledged that this growth has not fully ensured the strengthening of the middle class or a reduction in poverty.