IHSG strengthens amid wait-and-see stance on BI policy direction

The Jakarta Composite Index (IHSG) on the Indonesia Stock Exchange (BEI) moved higher on Tuesday as market participants adopted a wait-and-see stance regarding the direction of Bank Indonesia’s (BI) benchmark interest rate policy. The IHSG opened 41.79 points, or 0.67 percent, higher at 6,273.57. Meanwhile, the LQ45 index of top 45 stocks rose 6.25 points, or 1.00 percent, to 634.00.

Phintraco Sekuritas Head of Research Ratna Lim stated that the IHSG is expected to potentially test resistance at the 6,250-6,300 level. However, she cautioned about the potential for profit-taking.

Domestically, Bank Indonesia’s Board of Governors Meeting is being held on Tuesday and Wednesday, with one of the agendas being to determine the BI-Rate policy, which currently stands at 5.75 percent. The central bank has raised the rate three times, totalling 100 basis points, throughout 2026.

Meanwhile, based on Bank Indonesia’s Banking Survey, the weighted net balance of new loan disbursement reached 93.08 percent in the second quarter of 2026, an increase from 38.74 percent in the first quarter of 2026 and higher than the 85.22 percent recorded in the second quarter of 2025. Working capital loans recorded the highest weighted net balance at 94.34 percent, followed by investment loans at 93.51 percent and consumer loans at 83.67 percent. Despite this, BI noted that banks implemented stricter lending standards in the second quarter of 2026. The increase in lending indicates that economic activity in the second quarter of 2026 remained expansive, driven by rising loan demand.

Internationally, the escalation of conflict between the United States and Iran has driven up crude oil prices, although sentiment briefly improved after a spokesperson for Iran’s Foreign Ministry raised hopes for a diplomatic resolution. The heightened conflict has added to market uncertainty amid investor concerns over valuations related to artificial intelligence. Ratna noted that if oil prices remain elevated for a prolonged period, it could push US inflation back up and increase expectations of a Federal Reserve interest rate hike.

Elsewhere, the People’s Bank of China maintained its key lending rates at record lows for the 14th consecutive month, keeping the one-year rate at 3 percent and the five-year rate at 3.5 percent. Despite China’s economic growth slowing in the second quarter of 2026, the central bank remains cautious amid the ongoing conflict in the Middle East.