Bank Indonesia held its BI Rate at 5.75% at its Board of Governors meeting on 20 and 21 October 2026, while raising the deposit facility rate to 5%. The lending facility rate stayed at 6.5%.
Governor Destry Damayanti said the decision was reinforced by larger incentives for domestic non-deliverable forward hedging instruments. The aim is to attract foreign capital inflows, maintain rupiah stability and deepen money and foreign exchange markets. The hedging cost incentive was introduced in June 2026, and foreign capital inflows attracted by it have reached $9.9 billion so far.
External pressure shapes the decision
The bank took the decision against rising external pressure, mainly from escalating geopolitical tensions in the Middle East. US monetary policy is also expected to stay tight for longer.
Damayanti said global financial uncertainty remains high. Oil and commodity prices remain elevated, and the Federal Reserve may keep US Treasury yields high.
The rupiah closed at 17,985 per US dollar on 20 October 2026. It has depreciated 0.61 percent point-to-point since the end of September.
Growth and credit outlook
Bank credit grew 13.26 percent year on year in September 2026. Investment credit rose 23.2 percent, working capital credit 11.89 percent and consumer credit 4.86 percent.
Third-party funds grew 8.22 percent over the same period. Bank Indonesia projects credit growth of 8 to 12 percent for 2026.
The central bank expects Indonesian economic growth of 4.9 to 5.7 percent this year. It projects global growth of 3 percent and global inflation pressure of 4.6 percent.
Inflation holds steady
Consumer price inflation was 3.28 percent year on year in September 2026. Volatile food inflation was 5.03 percent.
Bank Indonesia projects the rupiah to move stably.
Related: Bank of Mexico holds key rate at 6.50 percent · ADB sees Bank Indonesia holding rate at 5.75% in 2026
Source: Bank Indonesia
