Purbaya Believes Mortgage Rates Will Not Rise Even as BI Rate Rises to 5.25%

Yogyakarta, CNBC Indonesia - Finance Minister Purbaya Yudhi Sadewa said that bank lending rates would not spike even though Bank Indonesia raises rates this month. ‘The installments should not rise too much. Because the rate has risen only slightly,’ Purbaya said when he was met at JEC, Bantul, on Friday (22 May 2026). This aligns with statements by Governor of Bank Indonesia Perry Warjiyo, who stressed that banks in Indonesia can still keep lending rates at low levels, even as the Board of Governors decided to raise the policy rate by 50 basis points to 5.25%.

Perry said that banks can maintain lending rates at low levels because BI is directing a looser macroprudential policy, as a form of incentive to banks to continue channelling credit. ‘The looser macroprudential policy provides incentives to banks that channel lending and keeps interest rates low. Today we continue to push hard to grow credit,’ Perry said at a press conference, quoted on Friday (22 May 2026).

The macroprudential policy includes relaxing the Macroprudential Intermediation Ratio (RIM) by expanding its scope and strengthening the criteria for corporate securities and sukuk owned and issued by banks used as the basis for calculating RIM, effective from 1 July 2026.

‘Banks have RIM requirements of between 84% and 94%. We are encouraging compliance with 84-94% by broadening its coverage—from liabilities or funding not only traditional DPK, but also the issuance of securities, conventional or shariah bonds,’ Perry said.

‘In terms of deploying funds, not only lending but also purchases of conventional and shariah securities by banks, so the coverage is broader, thus the impetus for banks to push credit growth is widened,’ he explained.

This policy is complemented by an increase in the Macroprudential Liquidity Incentive Policy (KLM), providing an additional incentive of up to 0.5% of DPK for banks that meet the RIM value in line with the range set by Bank Indonesia but have not yet utilised the maximum KLM incentive of 5.5%, effective from 1 August 2026.

The BI rate itself rose by 50 basis points to 5.25% in April 2026. Alongside the BI Rate, the central bank also set the Deposit Facility rate at 4.25% and the Lending Facility rate at 6.00%.