TEMPO.CO, Jakarta - ASEAN Economist of United Overseas Bank Limited (UOB), Enrico Tanuwidjaja, predicts another rate hike by Bank Indonesia throughout this year, to the level of 6.5 percent. The central bank, he said, still has room to raise interest rates to maintain rupiah stability.
"So, UOB's prediction is 3 times a 25 basis point increase to 6.5 percent, now at 5.75 percent," said Enrico during a media briefing in Jakarta on Thursday, July 16, 2026.
He projects that BI will raise the BI-Rate in July, August, and in the fourth quarter of 2026.
Enrico believes that Bank Indonesia's decision to raise the benchmark interest rate to 5.75 percent was appropriate, as foreign capital inflows are picking up. UOB records that foreign capital entering the bond market reached US$470 million as of July 8, 2026, year-to-date. Meanwhile, in the stock market, foreign capital is still flowing out at US$4.39 billion year-to-date.
The projection of the BI-Rate increase aligns with the Federal Reserve interest rate hike projection.
Enrico also believes that the benchmark rate hike does not necessarily hinder economic growth, since liquidity is currently in a safe condition. He mentioned that the ratio of Liquid Assets to third-party funds (LA/TPF) is still around 25 percent.
With adequate liquidity conditions, Enrico recommends that banks channel funds to sectors with high multiplier effects. "We actually need a flow of funds in the manufacturing, food and beverage, and accommodation sectors," he said. "Especially MSMEs."
In the May-June period of this year, Bank Indonesia has raised interest rates three times, reaching the level of 5.75 percent, the last one during the June board of governors meeting.
Bank Indonesia Governor Perry Warjiyo said the rate hikes are part of the continued efforts to further strengthen the exchange rate stability of the rupiah amid high global uncertainty.
The central bank at the time also decided to raise the deposit facility interest rate to 4.75 percent and the lending facility interest rate by 25 bps to 6.5 percent.
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