BTN says banking sector ready to face BI Rate hike

Banking sector has basically prepared to face various monetary policy scenarios, including a possible rise in the benchmark rate

Jakarta (ANTARA) - PT Bank Tabungan Negara (Persero) Tbk or BTN said the banking industry is ready to face various scenarios of monetary policy, including an uptick in Bank Indonesia’s benchmark rate, BI Rate.

BTN Corporate Secretary Ramon Armando said every bank essentially already has adequate risk management to anticipate the impact of a BI Rate hike on funding costs or cost of funds.

‘The banking sector is basically ready to face various monetary policy scenarios, including a possible rise in the benchmark rate,’ Ramon said in a statement in Jakarta on Wednesday.

He said banks regularly conduct stress tests considering the potential BI Rate increase that could affect funding structure and banking liquidity.

Therefore, to maintain funding efficiency amid market pressure, the company also continues to strengthen the composition of cheap funds or current account savings account (CASA).

‘To reduce sensitivity to exchange-rate pressures and funding costs, BTN also continues to maintain an efficient funding structure by strengthening cheap funds (CASA) as the main focus of the company’s funding strategy,’ he explained.

Earlier, Bank Indonesia at the May 2026 Board of Governors Meeting decided to raise the BI-Rate by 50 basis points (bps) from 4.75 percent to 5.25 percent.

In addition, the deposit facility rate rose by 50 bps to 4.25 percent, while the lending facility rate increased by 50 bps to 6 percent.

The BI Rate hike was the first adjustment after the policy rate had been kept at 4.75 percent since September 2025. Throughout 2025, BI had previously cut the policy rate five times with total reductions of 125 bps.

On the other hand, the rupiah exchange rate at the close of trade on Wednesday (20/5) was recorded as strengthening by 52 points or 0.29 percent to Rp17,654 per United States dollar, compared to the previous level of Rp17,706 per U.S. dollar.

Bank Indonesia’s Jakarta Interbank Spot Dollar Rate (JISDOR) also strengthened to Rp17,685 per U.S. dollar from Rp17,719 per U.S. dollar.