BI Rate Hits 5.75%, Airlangga Urges State Banks Not to Rush Credit Rate Hikes
Coordinating Minister for Economic Affairs Airlangga Hartarto has asked banks that are members of the Association of State-Owned Banks (Himbara) not to rush into raising lending rates. This is in response to Bank Indonesia (BI) again increasing its benchmark interest rate, or BI Rate, to 5.75% in June 2026.
This hope was conveyed by Airlangga after accompanying the Board of Directors and Commissioners of Himbara in a meeting with President Prabowo Subianto at the Presidential Palace complex in Jakarta on Thursday (18/6). He acknowledged that the BI Rate hike would automatically transmit to banking interest rates.
“Yes, this relay has a transmission related to the increase in lending rates. It is hoped that Himbara will not be too quick to raise them,” Airlangga told reporters.
Airlangga stressed the importance of maintaining economic growth momentum by ensuring that lending activities continue to run smoothly. The government hopes that credit expansion will not be hampered by overly aggressive interest rate adjustments at the banking level.
Bank Indonesia’s move to raise the benchmark rate was triggered by pressure on the rupiah, which had briefly touched Rp18,000 per US dollar. Over the past month, BI has cumulatively raised interest rates by 100 basis points (bps).
The details are that BI raised rates by 50 bps in May 2026, followed by a 25 bps increase through a Weekly Board of Governors Meeting on 9 June, and the latest 25 bps on Thursday (18/6). Based on Bank Indonesia data, the average lending rate in May 2026 stood at 8.72%, while the one-month deposit rate was recorded at 4.26%.
PT Bank Rakyat Indonesia (Persero) Tbk, or BRI, stated that it does not yet see an urgent need to raise interest rates significantly in the near term. BRI’s Group Head of Liquidity and Funding Management Group, Teguh Sulistyono, mentioned that from a long-term interest rate perspective, liquidity conditions still allow for holding off drastic increases.
The government continues to monitor the transmission impact of this monetary policy on the real sector, to ensure national economic stability is maintained amid fluctuations in the rupiah exchange rate and the global trend of high interest rates.