Video: Senior Deputy Governor Destry Damayanti Reveals Reasons Behind 100 Bps BI Rate Hike

The Bank Indonesia Board of Governors meeting in June 2026 decided to raise the benchmark interest rate by 25 basis points. This policy brings the total BI Rate increase since May 2026 to 100 basis points, reaching 5.75%.

Senior Deputy Governor of Bank Indonesia, Destry Damayanti, stated that the interest rate policy is part of the central bank’s mandate to maintain the stability of Indonesia’s financial system. Amid immense global pressures, BI is prioritising stability while still ensuring measures to encourage growth.

The 100 basis point BI Rate hike, which is BI’s monetary instrument for maintaining stability, is also accompanied by macroprudential policies through incentives for banks willing to channel credit to priority sectors, amounting to IDR 420 trillion.

In the payment system, BI is providing transaction relief for MSMEs and deepening financial markets, steps expected to help maintain Rupiah exchange rate stability.

This comes amid global uncertainty that is driving a strengthening US Dollar Index and pressuring major global currencies, including the Rupiah. Therefore, through the BI Rate increase, it is hoped that the attractiveness of Rupiah instruments for foreign investors will improve, with net inflows into Government Securities (SBN) and Bank Indonesia Rupiah Securities (SRBI) reaching above IDR 103 trillion as of June 2026.

BI also highlighted geopolitical developments in the Middle East impacting energy price rises, which have led to increases in non-subsidised fuel prices that could drive inflation. On the other hand, rising prices of other commodities such as coal present an opportunity for increasing the country’s foreign exchange reserves.