Bank Indonesia Holds Benchmark Rate at 5.75%
Bank Indonesia has decided to keep its benchmark BI-Rate at 5.75%, maintaining the rate as policymakers balance economic growth with pressure on the rupiah and uncertain global financial conditions.
The decision was made during the central bank’s Board of Governors Meeting on September 22-23, 2026. BI also maintained its Deposit Facility rate at 4.75% and Lending Facility rate at 6.50%.
The decision comes as global markets face higher energy prices, tighter monetary policy in major economies and continued geopolitical uncertainty.
Rupiah Stability Remains a Key Priority
Bank Indonesia said the decision is consistent with its strategy to stabilize the rupiah while maintaining inflation within its target range and supporting sustainable economic growth.
The rupiah was recorded at approximately Rp17,855 per U.S. dollar on September 22, representing a 0.78% depreciation from the end of August.
The central bank is therefore continuing to use several policy instruments to support the currency and encourage foreign capital inflows.
Bank Indonesia Strengthens Hedging Incentives
Rather than relying only on interest-rate policy, Bank Indonesia is also strengthening incentives related to foreign exchange hedging.
The central bank announced changes to incentives for swap hedging and domestic non-deliverable forward transactions. It also expanded eligible underlying foreign-funding transactions to include foreign bank loans and foreign direct investment in addition to portfolio inflows.
These measures are intended to help improve foreign-exchange market depth and support rupiah stability during periods of heightened global volatility.
Inflation Remains Within the Target Range
Inflation remains another important consideration for Bank Indonesia.
The central bank is maintaining its focus on keeping inflation within the 2.5% ± 1% target range for 2026 and 2027. According to BI, global commodity prices have increased amid renewed Middle East tensions, creating additional inflationary risks.
At the same time, government policies and domestic economic conditions continue to influence consumer prices.
Keeping the policy rate unchanged allows BI to maintain its current monetary stance while monitoring how external developments affect inflation and the rupiah.
Indonesian Bank Lending Continues to Grow
Despite global uncertainty, domestic bank lending has continued to expand.
Bank Indonesia reported that bank credit grew 13.65% year-on-year in August 2026, accelerating slightly from 13.58% in July.
Investment loans recorded particularly strong growth at 25.11%, while working-capital loans increased 11.45% and consumer loans grew 5.07%.
The figures indicate that financial intermediation remains active as the central bank seeks to support economic growth.
Economic Growth Outlook Remains Positive
Bank Indonesia continues to project Indonesia’s economic growth within a 4.9%-5.7% range for 2026.
The central bank expects economic activity to remain supported by government stimulus programs, improving confidence and the use of different sources of economic growth.
However, external conditions remain a key factor. Higher global interest rates, energy-price movements and geopolitical uncertainty could continue to influence Indonesia’s financial markets.
What Comes Next for Indonesian Finance?
The decision to keep the BI-Rate unchanged shows that Bank Indonesia is maintaining its current policy balance between supporting growth and protecting financial stability.
The central bank will continue monitoring the rupiah, inflation, capital flows and global monetary policy as it assesses future decisions.
For Indonesia’s financial markets, developments in U.S. interest rates, oil prices and global investor sentiment will remain important factors through the remainder of 2026.
