Coordinating Minister Airlangga: BI Rate Hike to 5.50 Percent Maintains Economic Stability

Coordinating Minister for Economic Affairs Airlangga Hartarto has affirmed that Bank Indonesia’s (BI) move to raise its benchmark interest rate, or BI Rate, is primarily aimed at maintaining national economic stability. The policy is considered to have sent a strong signal to the market amidst global uncertainty and turmoil. Airlangga revealed that the market’s response to the 25 basis point BI Rate hike to 5.50% has shown positive results, reflected in the strengthening of the Jakarta Composite Index (IHSG) and the rupiah exchange rate beginning to show an appreciating trend. “The BI Rate was raised because it prioritises stability. So with the BI Rate increase, the response from the IHSG is clearly visible and good, entering the green zone. Secondly, the rupiah has also slightly strengthened,” Airlangga stated on Tuesday. Based on Tuesday’s trading data, the rupiah exchange rate closed 130 points or 0.71% stronger at Rp18,058 per US dollar. In line with this, the IHSG on the Indonesia Stock Exchange (BEI) surged significantly by 404.51 points, or 7.57%, to a position of 5,746.65. Bank Indonesia previously decided to raise the BI Rate to strengthen exchange rate stabilisation and ensure inflation remains under control. This step was taken after the rupiah’s depreciation was assessed to have exceeded the central bank’s projections due to external pressures. Airlangga added that Indonesia’s economic fundamentals are currently very strong, supported by first-quarter 2026 economic growth reaching 5.61 percent year-on-year. In addition, solid export performance and positive views from partner countries such as Singapore strengthen Indonesia’s bargaining position. “The market sees Indonesia as responsive to current turmoil or situations. Singapore also appreciates the policies taken by Indonesia, especially those oriented towards national interests,” he added. On the other hand, the government also continues to monitor global supply chain resilience, particularly the impact of disruptions from the Middle East conflict. Airlangga is optimistic that Indonesia holds a strategic position, especially in the fertiliser sector with the capability to export up to 1.5 million tonnes of urea to the regional area.