Coordinating Minister Airlangga: BI Rate Hike Aimed at Safeguarding Economic Stability

Jakarta (ANTARA) - Coordinating Minister for Economic Affairs Airlangga Hartarto stated that the increase in Bank Indonesia’s benchmark interest rate (BI Rate) was implemented to maintain economic stability and send a strong signal to the market amid global turmoil. He noted that the market’s response to the 25 basis point BI-Rate hike has shown positive results. “The BI Rate was raised because it prioritises stability. With the BI-Rate increase, the IHSG’s response looks good, entering the green zone. Secondly, the rupiah has also strengthened slightly,” said Airlangga at the Office of the Coordinating Ministry for Economic Affairs in Jakarta on Tuesday. The rupiah exchange rate at Tuesday’s close strengthened by 130 points, or 0.71 percent, to Rp18,058 per US dollar from the previous Rp18,188 per US dollar. The Jakarta Composite Index (IHSG) of the Indonesia Stock Exchange (BEI) also closed higher on Tuesday afternoon, strengthening by 404.51 points, or 7.57 percent, to a position of 5,746.65. Earlier, Bank Indonesia raised the BI Rate by 25 basis points to 5.50 percent to strengthen rupiah exchange rate stabilisation and keep inflation under control. BI stated that the depreciation of the rupiah exchange rate had exceeded the central bank’s projections, necessitating further policy measures to bolster rupiah stability. According to Airlangga, the market views this policy as a responsive step in facing current global turmoil and situations. “The market sees Indonesia as responsive to the turmoil or the current situation,” he said. He stated that the government continues to prioritise national economic stabilisation because Indonesia’s economic fundamentals are considered still strong. According to him, this condition is supported by export performance, macroeconomic conditions, and positive views from partner countries towards the Indonesian economy. “The economy’s foundation is indeed strong, both in terms of exports and macro terms,” he noted. Statistics Indonesia (BPS) previously reported that Indonesia’s economy in the first quarter of 2026 grew by 5.61 percent on an annual basis or year-on-year (yoy). The Coordinating Minister also mentioned that Singapore appreciated several Indonesian economic policies deemed oriented towards national interests, including the single-window export policy. “Singapore says Indonesia’s fundamentals are strong. Singapore also appreciates the policies taken by Indonesia, especially for national interests, including the single-window export policy; they encourage the implementation of this policy,” he revealed. Additionally, Airlangga stated that the world is currently paying great attention to global supply chain resilience due to disruptions from the war in the Middle East. He assessed that Indonesia holds a fairly strong position in the fertiliser sector as it is still able to export around 1.5 million tonnes of urea to countries in the region. “Indonesia is one of the largest fertiliser factories in ASEAN,” he said.