Full Breakdown
Bank Indonesia Holds Benchmark Rate at 5.75% Amid Global Uncertainty
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Core Decision and Immediate Rationale
On September 22, 2026 the Bank Indonesia (BI) Board of Governors decided to keep the benchmark BI-Rate at 5.75 percent, with the deposit facility at 4.75 percent and the lending facility at 6.5 percent. The decision, to be announced on September 23, 2026, is aimed at anchoring the rupiah amid volatile global financial markets, elevated energy prices, and tighter monetary stances in advanced economies.
Economic Context and Policy Background
Indonesia’s central bank has raised rates by a cumulative 100 basis points in May and June 2026, bringing the policy rate to its highest level since April 2025. Inflation accelerated to 3.19 percent in August, remaining inside the 1.5 percent–3.5 percent range set by BI and within the government’s 2.5 percent ± 1 percent target band for 2026-2027. Global growth is projected near 3 percent, while the U.S. Federal Reserve’s policy rate sits in a 3.75 percent–4.00 percent band, pressuring emerging-market capital flows.
Data Highlights
- Benchmark rate: 5.75 percent (unchanged)
- Deposit facility: 4.75 percent; Lending facility: 6.5 percent
- Inflation (August 2026): 3.19 percent (within target)
- 2026 growth forecast: 4.9 percent–5.7 percent
- Trade balance (July 2026): surplus of US$0.12 billion, reversing a US$0.45 billion deficit the month before
- Foreign portfolio inflows (Q3, as of September 21, 2026): net US$0.4 billion
Official Statements & Responses
Governor Destry Damayanti emphasized that maintaining the rate is consistent with BI’s focus on stabilizing the rupiah against “persistent external crosscurrents” and safeguarding macro-economic stability. The central bank also highlighted the importance of a strong balance of payments, citing the recent trade surplus and resilient foreign portfolio inflows as buffers against external shocks.
Verbatim Quotes
- “This landscape demands strengthened policy responses and tight synergy between fiscal and monetary policy to reinforce external resilience, safeguard macroeconomic stability, and drive domestic growth,” — Governor Destry, newly appointed governor
- “Given that Bank Indonesia raised its benchmark rate by a cumulative 100 basis points in recent months, our view is that Bank Indonesia made the appropriate move by maintaining the rate at 5.75% during the September Board of Governors Meeting,” — Teuku Riefky
What’s Next
BI signaled that further rate hikes could re-emerge as a policy lever toward the end of the year or early 2027 if external imbalances worsen and imported inflation intensifies. Coordination with the Ministry of Finance will remain a priority to preserve external resilience and support the projected growth corridor.