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Jakarta, July 22, 2026 – Bank Indonesia (BI) has decided to keep its benchmark interest rate unchanged at 5.75 percent in July 2026, underscoring its commitment to maintaining rupiah stability and keeping inflation within target amid persistent global uncertainty.
The central bank also left the deposit facility rate at 4.75 percent and the lending facility rate at 6.50 percent.
Governor Perry Warjiyo emphasized that the decision reflects BI’s priority to anchor inflation expectations and strengthen the rupiah against external pressures.
“This policy is consistent with efforts to stabilize the currency and ensure inflation remains within the 1.5–3.5 percent target range for 2026 and 2027,” he said.
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The move comes against a backdrop of heightened volatility in global financial markets, where emerging economies continue to face capital outflow risks and exchange rate pressures.
BI’s stance signals caution, balancing the need for stability with the imperative of supporting economic growth.
The central bank highlighted several key objectives behind its decision, reinforcing the rupiah against external shocks remains a top priority.
BI aims to keep inflation expectations firmly anchored.
Incentive policies are being expanded to attract foreign portfolio inflows.
BI is accelerating reforms in the money and foreign exchange markets to improve liquidity and reduce segmentation.
Beyond interest rates, BI continues to deploy a mix of macroprudential and payment system policies.
Macroprudential measures are designed to support credit growth in the real sector while safeguarding financial stability.
Meanwhile, BI is pushing for wider adoption of digital payments, strengthening industry structures, and enhancing infrastructure resilience.
This policy mix reflects BI’s dual mandate ensuring stability while supporting sustainable growth.
By maintaining a cautious stance, the central bank hopes to navigate global headwinds without derailing domestic expansion.
The current rate reflects a series of hikes earlier this year.
BI raised rates three times since May 2026, totaling 100 basis points, moving from 4.75 percent to 5.75 percent by June.
An out of cycle hike on June 9 underscored the urgency of defending the rupiah amid external turbulence.
Prior to May, BI had held the rate steady at 4.75 percent since September 2025.
For businesses, borrowing costs remain elevated, potentially slowing credit expansion but ensuring currency stability.
Households may benefit from attractive deposit rates, though lending costs remain high.
For investors, Indonesia’s firm stance could bolster confidence in rupiah denominated assets, particularly in times of global volatility.
By holding rates steady, BI sends a clear signal stability comes first.
In an environment of global uncertainty, the central bank is determined to protect the rupiah, anchor inflation, and sustain investor confidence even if it means tighter financial conditions at home.
