Coverage: Q2 2026 · Information to 25 September 2026
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Published: 25 September 2026 | Region: Asia-Pacific | Country: Indonesia | Coverage: Q2 2026 (April–June 2026) | Classification: Premium Intelligence
Desk view — Indonesia, Q2 2026
- Policy turned sharply. Bank Indonesia raised the BI-Rate by 100 basis points in four weeks, from 4.75% to 5.75%, in three steps on 20 May, 9 June and 18 June 2026, to defend a rupiah that had weakened to Rp17,700 per US dollar on 19 May.
- Credit accelerated regardless. Bank lending growth rose from 9.98% in April to 12.67% in June and 13.65% in August, led by investment loans (+24.90% in June) and corporate borrowers (+20.45%). MSME lending grew just 1.05%.
- Funding is the constraint. Deposit growth fell from 13.47% in May to 10.21% in June, pushing the loan-to-deposit ratio to 88.32% from 84.64% in March.
- Asset quality held. The gross NPL ratio eased to 2.09% in June from 2.17% in May, and loans at risk fell to 8.47%. The capital adequacy ratio was 23.70%.
- The large banks diverged. Bank Mandiri (+24.4%) and BRI (+17.5%) grew first-half profit strongly; BCA grew 1.8% as its margin fell to 5.3%.
Executive summary
Indonesia’s banks went through the second quarter of 2026 in an unusual combination: a sudden tightening of monetary policy alongside accelerating credit growth. The trigger was external. Bank Indonesia pointed to heightened global turmoil stemming from the war in the Middle East, and the rupiah weakened from Rp16,880 per US dollar in mid-February to Rp17,700 on 19 May. Bank Indonesia responded with a 50 basis-point increase on 20 May, a further 25 basis points at an unscheduled weekly Board meeting on 9 June and another 25 basis points on 18 June. The BI-Rate ended the quarter at 5.75%, 100 basis points higher than at the start of the year.
Lending has so far not slowed. Data from the Financial Services Authority (OJK) show bank credit up 12.67% year on year at the end of June, to IDR 9,081 trillion, and Bank Indonesia reports growth of 13.65% in August. The expansion is concentrated in investment and corporate loans, while MSME lending rose only 1.05%. Deposits have not kept pace. Third-party funds grew 10.21% in June, down from 13.47% in May, and the loan-to-deposit ratio reached 88.32%.
The system’s buffers remain large. At the end of June the capital adequacy ratio was 23.70%, the gross non-performing loan (NPL) ratio 2.09% and the liquidity coverage ratio 182.75%. Economic growth held up at 5.29% in Q2. The question for the rest of 2026 is funding: whether deposits can finance double-digit loan growth at higher rates, and how long Bank Indonesia keeps policy tight under its new Governor, Destry Damayanti.