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Jun 18, 2026 Major2
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Bank Indonesia Raises BI-Rate to 5.75% in June Policy Decision
Bank Indonesia raised its benchmark BI-Rate by 25 basis points to 5.75% on 18-19 June 2026, marking the third consecutive rate increase in less than a month. The decision aims to stabilize the weakening Rupiah and control inflation within the government's 2.5±1% target range.
Quick Facts
Who
Bank Indonesia
What
BI-Rate increased by 25 basis points
When
18-19 June 2026
Where
Jakarta
- BI-Rate increased by 25 basis points
- Deposit Facility rate increased by 25 basis points
- Lending Facility rate increased by 25 basis points
- Monetary policy decision announced
- Bank Indonesia
The Monetary Policy Board of Bank Indonesia decided on 18-19 June 2026 to raise the benchmark interest rate, known as the BI-Rate, by 25 basis points to 5.75 percent, according to Governor Perry Warjiyo. The decision also included increases in the Deposit Facility rate to 4.75 percent and the Lending Facility rate to 6.50 percent, each rising by 25 basis points.
This marks the third consecutive rate increase within a short timeframe. In May 2026, Bank Indonesia raised the BI-Rate by 50 basis points to 5.25 percent. The central bank then surprised markets on 9 June with an additional 25 basis point increase to 5.50 percent. Combined, these three moves represent a total increase of 100 basis points over less than one month.
According to a CNBC Indonesia poll of 14 financial institutions, eight predicted the rate would rise to 5.75 percent, while six expected rates to remain at 5.50 percent, with the median projection landing at 5.75 percent. Bank Indonesia characterized the rate increase as a continuation of efforts to strengthen Rupiah exchange rate stability and as a pre-emptive measure to maintain inflation within the government's target range of 2.5 percent plus or minus 1 percent for 2026 and 2027.
The rapid succession of rate hikes reflects Bank Indonesia's response to currency weakness and inflation concerns facing Southeast Asia's largest economy. The central bank has indicated its commitment to addressing external pressures on the Rupiah while ensuring domestic price stability remains within official targets.
Why This Matters
Bank Indonesia's aggressive rate-hiking cycle—100 basis points in under a month—signals heightened concern about currency depreciation and inflation in Southeast Asia's largest economy. For investors and businesses operating in Indonesia, this signals tightening financial conditions that will increase borrowing costs, potentially slowdown economic growth, and impact asset valuations. The central bank's pre-emptive stance suggests further rate increases may follow if the Rupiah or inflation pressures persist.
Timeline & Sources
Jun 9, 2026
WireBank Indonesia raises BI-Rate by 25 basis points to 5.50%
Jun 18, 2026
WireBank Indonesia announces decision to raise BI-Rate by 25 basis points to 5.75%
Jun 18, 2026
WireCNBC Indonesia reports the BI-Rate increase