Economist: BI-Rate Could Rise Again if Rupiah Surpasses Rp18,200
Bank Indonesia (BI) is assessed to still have room to raise its benchmark interest rate, the BI-Rate, in the future. An aggressive move is predicted if the rupiah exchange rate continues to face pressure past a certain psychological level.
Bank Danamon economist Hosianna Evalita Situmorang revealed that the potential for a BI-Rate increase remains open if the rupiah is pressured above Rp18,200 per US dollar. Besides the exchange rate factor, the current account deficit (CAD) condition is also a crucial indicator.
“A BI-Rate hike could continue if the rupiah remains pressured above Rp18,200 per US dollar and the current account deficit widens beyond 1.5 percent of GDP,” Hosianna said in Jakarta on Tuesday (9/6/2026).
Hosianna viewed BI’s decision to raise the BI-Rate by 25 basis points to 5.5 percent during the Weekly Board of Governors Meeting on Tuesday (9/6) as a positive step. The policy is considered a pre-emptive move to maintain exchange rate stability amidst global uncertainty.
On a year-to-date basis, the rupiah had weakened by up to 8 percent against the US dollar, even touching Rp18,190. Intervention via the interest rate is considered crucial to curb the risk of imported inflation and its knock-on effects on the domestic economy.
“This policy is projected to boost the yield attractiveness of domestic instruments,” Hosianna added. Indeed, the market responded positively with the rupiah strengthening by 0.7 percent to Rp18,070 in the spot market on Tuesday afternoon.
Besides raising interest rates, BI is also strengthening stabilisation through an increase in the SRBI interest rate structure, providing swap hedging incentives for foreign investors, and increasing the intensity of foreign exchange monetary operations.
However, challenges remain in the foreign exchange reserves position. As of the end of May 2026, Indonesia’s foreign exchange reserves stood at 144.9 billion US dollars, shrinking by 1.3 billion US dollars compared to the previous month. This decline was triggered by government foreign debt payments and exchange rate stabilisation efforts.
In the last five months, foreign exchange reserves have decreased significantly by 11.6 billion US dollars from the end of December 2025 position of 156.5 billion US dollars. Based on JISDOR data on Tuesday afternoon (9/6), the rupiah was at Rp18,141 per US dollar, strengthening slightly from the previous day’s Rp18,171.
The market is now awaiting the outcome of BI’s Monthly Board of Governors Meeting scheduled for 17-18 June 2026 to see the direction of future monetary policy.
PT Bank Rakyat Indonesia (Persero) Tbk, or BRI, assessed Bank Indonesia’s decision to raise the benchmark interest rate by 25 basis points to 5.5% as the right move.
The move was deemed to affirm the policy priority of returning to exchange rate strengthening and inflation anchoring, while increasing the attractiveness of portfolio flows into Indonesia.