Indonesia bond yields climb as Bank Indonesia keeps policy rate at 5.75%

Bank Indonesia (BI) maintained its benchmark policy rate at 5.75% after its recent board meeting. Despite the unchanged rate, investors demanded a higher risk premium, pushing the yield on Indonesia’s 10‑year sovereign bond (SBN) up to about 7.35% by the weekend, above the roughly 7.1% level seen before the meeting.

Credit to the banking sector expanded 12.67% year‑on‑year through June 2026, yet bank stocks posted weak performance. Shares of PT Bank Central Asia Tbk, PT Bank Negara Indonesia Tbk, PT Bank Rakyat Indonesia Tbk and PT Bank Mandiri Tbk all fell between 0.3% and 7.8% over the preceding week. Analysts say a stronger catalyst, such as a future rate cut, is needed to lift bank valuations, but expect any rate easing not before 2027.