TEMPO.CO, Jakarta – Bank Indonesia (BI) has maintained the benchmark interest rate or BI-Rate at 5.75 percent based on the board of governors' meeting decision
"Based on a comprehensive assessment and projections, the Bank Indonesia Board of Governors' Meeting on July 21-22, 2026, decided to maintain the BI-Rate at 5.75 percent," BI Governor Perry Warjiyo said during a press conference on Wednesday, July 22.
The central bank also left its deposit facility rate unchanged at 4.75 percent and its lending facility rate at 6.50 percent.
Focus on Rupiah Stability and Inflation
Perry said the decision forms part of BI's broader policy mix aimed at strengthening rupiah stability in the face of volatile global financial conditions.
The move is also intended to ensure inflation remains under control and stays within the central bank's target of around 2.5 percent in both 2026 and 2027.
The rupiah has faced pressure in recent months amid heightened uncertainty in global markets, prompting BI to prioritize exchange-rate stability while balancing domestic economic growth concerns.
Economists Had Expected a Hold
Ahead of the announcement, several economists had predicted that Bank Indonesia would leave rates unchanged.
Researchers at the Institute for Economic and Social Research (LPEM) at the University of Indonesia's Faculty of Economics and Business projected that the central bank would keep the BI-Rate at 5.75 percent.
"Most inflationary pressures are still supply-driven, while further monetary tightening would likely provide diminishing support for the rupiah and could weigh on domestic economic activity," LPEM researcher Jahen F. Rezki wrote in the institution's Macroeconomic Analysis Series published on July 21.
Three Rate Hikes Since May
Bank Indonesia raised its benchmark rate three times between May and June, bringing the BI-Rate to its current level of 5.75 percent.
The latest increase came during the June policy meeting, when Perry said tighter monetary policy was needed to further strengthen the rupiah amid elevated global uncertainty.
The central bank's latest decision signals a pause in its tightening cycle as policymakers assess the impact of previous rate hikes on inflation, financial markets, and domestic economic activity.
Anastasya Lavenia Yudi contributed to the writing of this article.
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