Bank Indonesia (BI) has raised its benchmark interest rate to 5.5% to attract more foreign investment. Governor Perry Warjiyo explained that this move is an adjustment to encourage foreign portfolio inflows into Indonesia.
At the weekly Board of Governors meeting on Tuesday, BI decided to increase the BI Rate by 25 basis points (bps), bringing it to 5.5%.
“Today we raised it again to 5.5 percent. We don’t like raising interest rates, but to attract foreign portfolio investment, interest rates abroad are rising everywhere, so we adjust to market mechanisms,” Perry said during a meeting with the Budget Committee of the House of Representatives in Jakarta, Tuesday, June 9, 2026.
Previously, BI had raised the BI Rate by 50 bps at the monthly meeting on May 19–20, 2026. That was the first adjustment after keeping the rate at 4.75% since September 2025.
In 2025, BI actually lowered the benchmark rate five times, with a total cut of 125 bps. BI is scheduled to hold its next monthly meeting on June 17–18, 2026.
Other Measures to Stabilize the Rupiah
Perry explained that BI is also taking other steps to keep the rupiah stable. These include:
▪️ Intervening in the foreign exchange market through overseas Non‑Deliverable Forward (NDF), spot market, and Domestic NDF (DNDF) transactions.
▪️ Strengthening foreign exchange reserves.
▪️ Making Bank Indonesia Rupiah Securities (SRBI) more attractive.
▪️ Working with the government so investment flows also go into government bonds and the stock market.
BI is also expanding the use of local currency transactions (LCT) for trade and investment, and tightening supervision of dollar purchases by banks and companies together with the Financial Services Authority.
Another step is lowering the limit for foreign exchange purchases without underlying transactions to USD 25,000 per person per month, effective June 2026.
Sources: Kabarin
Feat Image: via Bank Indonesia
