To Stabilise Rupiah, Could the BI Rate Rise Again Next Week?

Bank Indonesia has responded to the potential for a BI-Rate increase at the monthly Board of Governors’ Meeting on 17-18 June 2026. The central bank stated that it continuously conducts assessments and evaluations in every policy decision to strengthen exchange rate stabilisation. “We will continue to evaluate because BI, of course, does this through thorough assessment and evaluation. We will continue to evaluate the steps taken in an effort to further strengthen our exchange rate stability,” said Ramdan Denny Prakoso, Executive Director of Bank Indonesia’s Communication Department, at the Parliament Building in Jakarta on Wednesday. The Bank Indonesia Weekly Board of Governors’ Meeting on 9 June 2026 decided to raise the BI-Rate by 25 bps to 5.50%, the Deposit Facility interest rate by 25 bps to 4.50%, and the Lending Facility interest rate by 25 bps to 6.25%. “This increase is a further step to strengthen the stabilisation of the Rupiah exchange rate from the impact of high global turmoil due to the war in the Middle East and as a pre-emptive measure to keep inflation in 2026 and 2027 within the Government’s target range of 2.5±1%,” BI stated in a release. BI said this policy is also aimed at increasing yields to attract foreign portfolio investment inflows into Indonesia. “In the evaluation since the Monthly Board of Governors’ Meeting on 19-20 May 2026, the Rupiah exchange rate showed a weaker development than previously estimated,” said BI.