IHSG Gains This Morning, Up 0.6%

Jakarta, CNBC Indonesia — The Jakarta Composite Index (IHSG) opened higher in Thursday trading (21 May 2026). The IHSG rose by 0.60% or 37.78 points to 6,356.28. A total of 295 shares advanced, 96 declined, and 568 traded flat. Turnover reached Rp333.7 billion with a trading volume of 493.6 million shares across 40,150 transactions.

Meanwhile, Bank Indonesia recorded a 50 basis point hike in the policy rate, to 5.25%, at the Board of Governors meeting for 19–20 May 2026. In line with that decision, BI also increased the Deposit Facility to 4.25% and the Lending Facility to 6.00%. The decision ends BI’s long hold on rates; previously the central bank had kept the BI Rate for eight consecutive months.

“Based on a comprehensive assessment of the global economy and the risks we have outlined, the Board of Governors at the meeting on 19–20 May 2026 decided to raise the BI Rate by 50 basis points to 5.25%,” said BI Governor Perry Warjiyo on Wednesday (20 May 2026). BI explained that the rate increase is intended to strengthen the stability of the rupiah against the deteriorating global conditions, particularly due to the war in the Middle East. The move is also aimed at keeping inflation in 2026–2027 within the target of 2.5%±1%.

Meanwhile, President Prabowo Subianto delivered the draft of the 2027 State Budget (APBN) in a DPR plenary session on Wednesday (20 May 2026). In his speech, Prabowo emphasised that the government will maintain the 2027 budget deficit at a low level, in the range of 1.8%–2.4% of GDP. The fiscal stance for next year is designed with more efficient and productive state expenditure. Government outlays are targeted to be in the range of 13.62%–14.8% of GDP, while revenues will be optimised at 11.82%–12.40% of GDP. “We will continue to strive to reduce and narrow this deficit,” Prabowo said at a speech in the DPR Building, Jakarta, on Wednesday (20 May 2026).

In addition to the deficit, Prabowo outlined several macro assumptions within the Macroeconomic Framework and the Main Policy Principles for Fiscal Policy (KEM PPKF) 2027. This document will form the basis for the preparation of the RAPBN 2027. On the exchange rate, the government targets the rupiah to be within Rp16,800–Rp17,500 per US$ in 2027. This assumption draws attention as the rupiah remains under heavy pressure against the United States dollar.

In terms of growth, the government targets the Indonesian economy to expand by 5.8%–6.5% in 2027. Meanwhile inflation is targeted at 1.5%–3.5%.