BI Hikes Benchmark Rate to 5.5 Percent to Stabilize Rupiah

RRI.CO.ID, Jakarta - Bank Indonesia (BI) unexpectedly announced another increase in the benchmark interest rate (BI Rate) by 25 basis points (bps) to 5.5 percent. The Deposit Facility and Lending Facility rates also rose by 25 bps to 4.5 percent and 6.25 percent, respectively.

The decision was made during BI’s weekly Board of Governors’ Meeting (RDG) on Tuesday, June 9, 2026. BI stated that several factors necessitated raising the BI Rate again.

“This increase is a further measure to strengthen rupiah exchange rate stabilization, particularly in light of the high global volatility caused by the war in the Middle East,” BI Governor Perry Warjiyo said in Jakarta on Tuesday, June 9.

He added that the move also serves as a pre-emptive measure to keep inflation in check for 2026 and 2027, ensuring it remains within the government’s target range of 2.5 ± 1 percent.

“The policy of raising interest rates again is also aimed at increasing returns, as an incentive to attract foreign portfolio investment inflows into Indonesia,” Perry said.

BI noted that the Weekly RDG is a standard practice under the law. The meetings are held every Tuesday to evaluate the implementation of the policy mix outlined in the Monthly RDG.

Since the last monthly RDG on May 19–20, the rupiah has weakened more than expected, driven by ongoing global volatility and strong domestic demand for foreign currency.

“Outflows of foreign portfolio investment from Indonesia also contribute to the weakening. In this regard, BI deems it necessary to take further steps to strengthen rupiah exchange rate stabilization,” Perry said.

He explained that these measures include boosting yields again and offering additional incentives to attract foreign investment. “The rupiah exchange rate stabilization measures taken are also aimed at maintaining Indonesia’s external economic resilience,” Perry concluded. (Gusti Panji)