Bank Indonesia Unexpectedly Raises Interest Rate to 5.5% - Tempo.co English
TEMPO.CO, Jakarta - Bank Indonesia (BI) has once again raised the benchmark interest rate (BI Rate) by 25 basis points to 5.5 percent. This decision was made in the Weekly Board of Governors (RDG) meeting held on Tuesday, June 9, 2026.
Throughout the year, Bank Indonesia announces its interest rate policies after holding the monthly Board of Governors meeting in the middle of each month. In the previous May Monthly Board of Governors Meeting, BI raised the interest rate by 50 bps to 5.25 percent.
BI Governor Perry Warjiyo stated that, since the RDG on May 18-19, 2026, the rupiah exchange rate has shown weaker development than expected. "Besides being caused by ongoing global turbulence and high demand for foreign currencies domestically, the weakening is also driven by the outflow of foreign portfolio investments from Indonesia," he said in a written statement on Tuesday, June 9, 2026.
Therefore, Perry said that BI deemed it necessary to take further steps to strengthen the stabilization of the rupiah exchange rate by increasing yields and several other incentives in monetary operations to encourage the inflow of foreign investment. He mentioned that stabilizing the exchange rate is also being pursued to ensure Indonesia's continued external economic resilience and to achieve the inflation targets for 2026 and 2027.
In addition to raising the BI Rate, BI also raised the Rupiah Securities of Bank Indonesia (SRBI) interest rate structure for the 6, 9, and 12-month tenors; provided incentives in the form of a reduction in the hedge swap rate for foreign investors; reopened the repo instrument auction window for 3, 6, 9, and 12-month tenors for the banking sector; and increased the intensity of monetary operations in both Rupiah and foreign currencies.
"In accordance with the law and the practice that has been in place so far, Bank Indonesia holds the Weekly Board of Governors Meeting every Tuesday to evaluate the implementation of the policy mix determined in the Monthly Board of Governors Meeting," said BI Executive Director of the Communication Department, Ramdan Denny Prakoso. In addition to raising the benchmark interest rate, the RDG also decided to raise the deposit facility interest rate by 25 bps to 4.5 percent, and the Lending Facility interest rate by 25 bps to 6.25 percent.
