Bank Indonesia (BI) maintained its benchmark interest rate at 5.75% at its Board of Governors Meeting on 18–19 August 2026, as the central bank continued to focus on rupiah stability and inflation amid elevated global financial market volatility.
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BI also kept the Deposit Facility rate unchanged at 4.75% and the Lending Facility rate at 6.50%. The decision followed a 25-basis-point increase in the BI Rate in June, bringing the cumulative increase since May 2026 to 100 basis points.
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Acting Governor of Bank Indonesia Destry Damayanti said the decision remained consistent with efforts to strengthen the rupiah exchange rate against the effects of heightened global volatility linked to the ongoing conflict in the Middle East, while keeping inflation within BI's target range of 2.5% ±1% in 2026 and 2027 and supporting economic growth.
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BI assessed that the global economic outlook remained weak and financial market uncertainty high. The central bank projected global economic growth of around 3.0% in 2026 and global inflation of around 4.5%. BI also expected the US Federal Reserve's policy rate to rise in the fourth quarter of 2026, while US Treasury yields were projected to remain high. These developments, together with the Middle East conflict and higher global oil and commodity prices, continued to affect capital flows to emerging markets.
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Against this backdrop, BI said it would continue using foreign exchange intervention and other monetary instruments to support rupiah stability. The rupiah stood at IDR 17,855 per USD on 18 August, strengthening by 0.78% compared with the end of July. BI also expanded incentives for hedging transactions and local currency transactions, as well as measures aimed at attracting foreign capital inflows.
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Indonesia's consumer price inflation remained within the central bank's target range. Headline inflation stood at 2.88% year-on-year in July 2026, down from 3.34% in June. Core inflation was recorded at 2.76%, while administered-price inflation reached 3.58%, partly following adjustments to non-subsidised Pertamax fuel prices. Volatile food inflation slowed to 2.52%.
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BI said it would continue coordinating with the government to manage food inflation and address potential weather-related risks. The central bank also said exchange-rate stabilisation would remain part of its measures to limit the impact of imported inflation.
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The central bank maintained its 2026 economic growth forecast at 4.9–5.7%. Indonesia's economy expanded by 5.29% year-on-year in the second quarter of 2026, following growth of 5.61% in the first quarter. BI attributed second-quarter growth partly to fiscal stimulus that supported government consumption and investment.
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Indonesia recorded a cumulative trade surplus of USD 3.58 billion from January to June 2026, although the trade balance posted a USD 0.45 billion deficit in June. Foreign portfolio investment recorded net inflows of USD 1.8 billion in the third quarter through 14 August, supported by government global bond issuance and foreign investment in government securities and Bank Indonesia's rupiah securities. Foreign exchange reserves stood at USD 145.3 billion at the end of July.
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BI also maintained an accommodative macroprudential policy to support lending to the real economy. Bank lending grew by 13.58% year-on-year in July, up from 12.67% in June. By the first week of August, banks had received IDR 446.5 trillion in incentives under BI's Macroprudential Liquidity Incentive Policy, including IDR 368.4 trillion through the financing channel and IDR 73.2 trillion through the interest-rate channel.
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The central bank is preparing additional macroprudential measures, including the Macroprudential Liquidity Incentive Policy for Money Market Deepening, scheduled to take effect on 1 September 2026, and the Macroprudential Inclusive Financing Ratio policy, which is due to take effect on 1 October. BI said the measures are intended to maintain liquidity and encourage bank financing to priority, inclusive and sustainable sectors.
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BI also said it would continue expanding digital payments and strengthening payment-system infrastructure. Digital payment volume reached 5.50 billion transactions in July, an increase of 28.69% year-on-year, while QRIS transaction volume rose by 82.42%. BI-FAST processed 546 million transactions with a total value of IDR 1,355 trillion during the month.
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The central bank said its monetary, macroprudential and payment-system policies would continue to be coordinated with government measures to maintain economic and financial stability while supporting growth.