Rupiah Weakens: Will Mortgage and Vehicle Loan Instalments Rise?

JAKARTA, KOMPAS.com - The weakening Rupiah is starting to raise new concerns for people who still have loan instalments to pay. Prolonged pressure on the Rupiah could create room for banks to raise lending rates. This condition has the potential to impact consumer credit, such as mortgages (KPR) and vehicle loans (KKB). The risk is greater for debtors who use a floating interest rate scheme. After the benchmark interest rate rises, banks will adjust deposit and lending rates. As a result, the amount of instalments could increase, especially for loans with a floating rate scheme. “If the Rupiah continues to weaken, interest rates will also tend to increase. If the loan interest rate is variable, then the potential for interest payments on instalments could increase,” he said to Kompas.com, Friday (15/5/2026). However, David believes that the Bank Indonesia (BI) benchmark interest rate will remain at 4.75 percent as long as the average inflation remains below 4 percent. April 2026 inflation fell significantly to 2.42 percent from 3.55 percent in January 2026. April inflation was also lower than in February and March 2026, which were 4.76 percent and 3.48 percent, respectively. However, the possibility of a BI rate increase remains open as long as geopolitical uncertainty in the Middle East continues. This tension risks pushing up energy and commodity prices. “If inflation rises to the 4 percent range in the second half of the year, the BI rate will increase by around 50 basis points,” said David. This condition could occur if BI raises the benchmark interest rate. A similar risk also arises if banks start to raise deposit rates to maintain third-party funds. Currently, lending rates have not automatically increased because banks still have sufficient liquidity. The Basic Lending Rate (SBDK) in February 2026 fell to 8.63 percent. Rupiah lending rates also decreased in aggregate in March 2026. “Prolonged Rupiah pressure could change this trend. If BI has to raise interest rates or banks start to raise deposit rates to maintain third-party funds, then the bank’s funding costs will increase and could eventually be passed on to lending rates,” said Josua to Kompas.com, Friday.