BI Rate held at 4.75% as rupiah pressured by Middle East conflict
JAKARTA – Bank Indonesia (BI) has again kept its benchmark interest rate, or BI Rate, unchanged at 4.75%, following the outcome of the Board of Governors Meeting (RDG) held on 16–17 March 2026.
BI Governor Perry Warjiyo said the deposit facility rate was also maintained at 3.75% and the lending facility at 5.50%.
The level has remained unchanged since BI last cut rates in September 2025, marking the lowest level since 2022.
“This decision is aimed at strengthening rupiah exchange rate stability amid worsening global conditions due to the conflict in the Middle East, while also ensuring the achievement of the 2026–2027 inflation target,” Perry said at a press conference on Tuesday (17/3).
He added that BI would continue to optimise its monetary instruments to safeguard external resilience, including anticipating the further impact of escalating global tensions.
Domestically, Perry said the central bank would also continue to strengthen macroprudential policy and maintain financial system stability.
Perry acknowledged that at this month’s RDG, BI no longer considered the possibility of further rate cuts, given the escalation of the Middle East conflict, which has weighed on the rupiah against the US dollar.
“We have removed that option because we will maintain the current BI Rate to strengthen intervention and ensure adequate foreign exchange reserves, calibrating them in line with future developments,” he said.
In the foreign exchange market, the rupiah gradually strengthened to IDR 16,991 per USD as of 2:57 PM WIB, after BI held the benchmark rate. The currency had briefly breached IDR 17,000 per USD several times since the start of the week.
“Bank Indonesia is fully committed and will go all out to maintain exchange rate stability using all the instruments available within our monetary policy,” Perry said.
The stock market reacted positively to BI’s policy stance, with Jakarta Composite Index (JCI) rising consistently by around 1% since the opening and holding above the 7,000 level. (KR/ZH)
