Bank Indonesia maintains BI-Rate at 5.75% amid Rupiah pressure

Bank Indonesia (BI) has decided to maintain its benchmark interest rate, the BI-Rate, at 5.75% following its Board of Governors meeting on October 20–21, 2026. While the benchmark rate remains unchanged, the central bank increased its deposit facility rate to 5% and maintained the lending facility rate at 6.5%.

Governor Destry Damayanti stated the decision considers rising external pressures, including geopolitical tensions in the Middle East and the anticipated “higher for longer” monetary policy stance of the U.S. Federal Reserve. These factors have contributed to volatility in the Rupiah, which was recorded at approximately Rp17,985 per U.S. dollar on October 20.

Domestically, Indonesia faces rising inflation, which reached 3.28% year-on-year in September 2026, approaching Bank Indonesia’s upper target of 3.5%. This increase is primarily driven by food, beverage, and tobacco sectors. Additionally, the Statistics Indonesia (BPS) agency has warned of potential monthly inflation increases from October through December based on historical year-end patterns.