BI Rate Rises to 5.25 Per Cent, Driving Rupiah Appreciation Today

Jakarta, Kompas.com - Bank Indonesia (BI) raised its policy rate (BI rate) by 50 basis points to 5.25 per cent, a move viewed as capable of stemming rupiah weakness. Doo Financial Futures’ Lukman Leong said market sentiment surrounding the rate hike was reflected in the rupiah’s movements, which strengthened in today’s spot market trading on Wednesday (5/2026). At the start of trading, the rupiah opened at Rp 17,738 per US dollar, or 0.18 per cent weaker than the level at the previous close. However, the rupiah gradually moved higher ahead of and after the announcement of the rate hike in the afternoon. By 15:07 WIB, the rupiah had strengthened 0.29 per cent or 52 points to Rp 17,653 per US dollar. “Yes (it has an impact on rupiah strengthening today). I think this surprising move is very supportive of the rupiah; previously Prabowo’s speech was also quite good in my view regarding budget tightening,” he told Kompas.com on Wednesday. Nevertheless, Leong noted that the decision to raise the BI rate should have been taken by BI since earlier meetings of the Board of Governors to prevent rupiah’s weakness from being as deep as it has recently been. However, he said this move is already enough and hopes rate hikes do not occur only this time, given that pressure on the rupiah may continue in the future. “It should have been done earlier, but this could dampen rupiah weakness. Investors always react more strongly to surprises; it would be wise for BI to raise again at the next meeting,” he explained. Consequently, the deposit facility rate rose 50 basis points to 4.25 per cent and the lending facility rate rose 50 basis points to 6 per cent. This BI rate increase is the first since BI last moved the BI rate on 24 April 2024 by 25 bps to 6.25 per cent. Since then, BI rate policy has tended to ease to spur national economic growth.