The meeting of the Bank Indonesia Governors on May 19-20, 2026, has decided to increase the BI-Rate by 50 basis points to 5.25%. Additionally, the Deposit Facility rate increased by 50 basis points to 4.25%, while 50 basis points raised the Lending Facility rate to 6.00%.
This increase was part of the following steps to enhance the stabilization of the Rupiah Exchange Rate, in response to rising global political tensions in the Middle East, as a precaution to keep inflation in 2026 and 2027 within the government-determined target of 2.5±1%.
The decision supports monetary policy’s pro-stability focus, strengthening Indonesia’s external economic security amid global turmoil. However, the macroprudential and payment system policies remain oriented toward encouraging growth (pro-growth).
The loose macroprudential policy continues to enhance economic growth by improving credit and financing to the real sector while keeping the financial system stable.
The payment system is designed to support digital economy activities and financial inclusion by expanding digital payments, enhancing the payment system industry, and improving the reliability and resilience of payment system infrastructure.
Reference:
Indonesian Central Bank
Leave a Reply