Economists Predict Bank Indonesia Holds BI-Rate at 4.75 Per Cent Amid Global Pressures
Jakarta — Multiple economists have forecast that Indonesia’s central bank (Bank Indonesia) will hold its benchmark interest rate (BI-Rate) at 4.75 per cent in the March 2026 monetary policy meeting, with the decision announced on Tuesday afternoon.
David Sumual, Chief Economist at BCA, stated that persistent external pressures remain the primary factor driving Bank Indonesia to maintain interest rates. “External pressures remain quite strong and the attractiveness of rupiah assets needs to be preserved,” Sumual said in Jakarta on Tuesday (17 March 2026).
He added that pressure on the rupiah’s exchange rate continues to depend heavily on developments in the conflict between the United States and Iran, as well as prospects for Indonesia’s sovereign credit rating.
Similarly, Faisal Rachman, Department Head of Macroeconomic and Financial Market Research at Permata Bank, believes that prolonged geopolitical conflict could drive higher oil prices and global inflation. He noted that markets have revised expectations for US Federal Reserve rate cuts downward, with only one cut now anticipated in 2026, likely in December.
“If the Fed only cuts rates once, then Bank Indonesia will likely also reduce rates only once this year,” Rachman said.
However, should geopolitical tensions escalate and oil prices remain above $100 per barrel, there is a possibility of no rate cuts at all, with policy potentially becoming more hawkish instead.
M Rizal Taufikurahman, Head of Macroeconomics and Finance at Indef, views opportunities for rupiah strengthening as still open, though in the short term overshadowed by external pressures. He noted that more solid rupiah appreciation would require improved global stability and sustained domestic fundamentals including fiscal health, inflation control, and policy credibility.
Economist Teuku Riefky from LPEM FEB UI reported that Indonesia experienced capital outflows of $0.63 billion over the past 30 days through 12 March 2026, and $0.75 billion since the start of the US-Iran conflict.