Reasons for BI Rate Hike to 5.50%: SRBI Unattractive, Rupiah Plummets

The weakening of the rupiah exchange rate prompted Bank Indonesia to raise its benchmark interest rate, or BI Rate, during a weekly Board of Governors Meeting today, Tuesday (9/6/2026). “In our various evaluations today, we observed that the rupiah’s depreciation has exceeded our earlier projections,” said BI Governor Perry Warjiyo at the DPR/MPR Building in Jakarta. The BI Rate was increased by 25 bps to 5.50%. The Deposit Facility rate rose by 25 bps to 4.50%, and the Lending Facility rate increased by 25 bps to 6.25%. Last month, BI had already raised the benchmark rate by 50 bps. According to Perry, this measure has not yet succeeded in attracting foreign capital into Bank Indonesia Rupiah Securities, thus failing to stem the rupiah’s depreciation. “Since April-May, SRBI had seen inflows. In June, government bonds and equities continued to see inflows, but SRBI has experienced outflows,” Perry explained. “Therefore, we need to raise the BI Rate so that the rupiah strengthens, stabilises, and next year’s inflation remains on target,” he stated. BI also raised the interest rate structure across all tenors—6, 9, and 12 months—to further increase yields and attract foreign portfolio investment. “We have also adjusted the SRBI instrument upwards to encourage inflows and increase its attractiveness, as one of the causes of the rupiah’s depreciation is an outflow in portfolio investment,” he concluded. Today, the rupiah closed at Rp 18,050 per US dollar, strengthening 0.66%. The rupiah appreciated slightly after the BI rate was announced this afternoon.