Bank Indonesia has raised its benchmark BI-Rate by 50 basis points to 5.25 per cent, as it moved to shore up stability. The decision was taken at the Board of Governors meeting held on 19 and 20 May 2026 and announced on Wednesday.
The Deposit Facility rate was raised by 50 basis points to 4.25 per cent and the Lending Facility rate by 50 basis points to 6.00 per cent, keeping the width of the interest rate corridor unchanged around the new policy rate.
CORRIDOR AND SRBI RATES MOVE HIGHER
Bank Indonesia also pointed to yields on its rupiah securities, known as SRBI, which had been raised in the run-up to the decision: as of 13 May 2026, rates on 6-, 9- and 12-month SRBI stood at 6.21 per cent, 6.31 per cent and 6.45 per cent respectively.
The 50 basis point step was larger than the 25 basis point increase most economists had expected and was Bank Indonesia's first rate increase since April 2024.
FOCUS ON RUPIAH AND FINANCIAL STABILITY
Bank Indonesia said the increase was aimed at strengthening rupiah exchange rate stabilisation amid global turmoil from the war in the Middle East, and was a pre-emptive measure to keep inflation within its target of 2.5±1% in 2026 and 2027.
The increase lifts the BI-Rate from 4.75 per cent, the level at which it had been held at every meeting earlier in 2026. Bank Indonesia reported that the rupiah stood at Rp17,700 per US dollar on 19 May 2026, 2.20 per cent weaker than at the end of April, while CPI inflation was 2.42 per cent year on year in April.
The decision was accompanied by macroprudential and payment-system measures, including lowering the threshold for cash foreign-currency purchases to USD 25,000 per person per month from June 2026. The updated corridor, with the Deposit Facility at 4.25 per cent and the Lending Facility at 6.00 per cent, keeps the Deposit Facility 100 basis points below and the Lending Facility 75 basis points above the BI-Rate.
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