12 June 2026 (closed)
Jakarta Composite Index (6,007.66) +121.62 +2.07%
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Seeing the fragile rupiah, Bank Indonesia did not want to wait for its next scheduled monthly monetary policy meeting on 17-18 June 2026. Instead, the central bank of Indonesia raised its benchmark interest rate (BI Rate) by 25 basis points (bps) to 5.50 percent on Tuesday 9 June 2025.
In line with expectations, Bank Indonesia's foreign exchange reserves recorded a decline last month. On Monday (8 June 2026), the central bank of Indonesia stated that these reserves fell USD $1.3 billion, settling at USD $144.9 billion at the end of May 2026. This marks the lowest level of foreign exchange reserves since June 2024.
Bank Indonesia decided to raise its benchmark interest rate (BI Rate) from 4.75 percent to 5.25 percent in an effort to support the fragile rupiah rate that had hit a record low against the US dollar one day earlier (trading at around IDR 17,700 per US dollar). This is an aggressive move but one that does indeed support the Indonesian currency.
The nephew of Indonesian President Prabowo Subianto, named Thomas Djiwandono, has officially been appointed as a Deputy Governor of Indonesia’s central bank (Bank Indonesia), in late January 2026. He was nominated by his uncle for this role in mid-January 2026, following the sudden resignation of the previous Deputy Governor, Juda Agung.
The central bank of Indonesia (Bank Indonesia) surprised markets by cutting its benchmark interest rate by 25 basis points to 4.75 percent at the September 2025 monetary policy meeting. It was the sixth rate cut in a monetary easing cycle that started in September 2024.
The central bank of Indonesia (Bank Indonesia) made a surprising move on Wednesday (15 January 2025) by cutting its benchmark interest rate by 25 basis points (bps) to 5.75 percent.
Analysts feel that the cryptocurrency market in Indonesia can get a wave of fresh air now that the supervision of crypto trading in Indonesia was transferred from the Commodity Futures Trading Regulatory Agency (Bappebti) to Indonesia's central bank (Bank Indonesia) and the Financial Services Authority (OJK) per 10 January 2025.
In March 2022 the US Federal Reserve started to tighten its monetary policy in an aggressive manner to combat high US inflation that –at one point– touched a 40-year high.
Before we give an update on the monetary policy of Indonesia’s central bank (Bank Indonesia), it is worth mentioning that Bank Indonesia Governor Perry Warjiyo was appointed for another five-year term (2023-2028) as the central bank’s chief.
The central bank of Indonesia (Bank Indonesia) raised its benchmark interest rate (BI 7-day reverse repo rate) by 25 basis points (bps) after concluding its two-day policy meeting on 18-19 January 2023. Indonesia’s benchmark rate now stands at 5.75 percent. It also raised its deposit facility and lending facility rates by 25 bps to 5.00 percent and 6.50 percent, respectively.
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A draft law that would amend Law Number 4 of Year 2023 on the Development and Strengthening of the Financial Sector (henceforth: RUU No. 4/2023 P2SK) is currently being discussed by Indonesia's House of Representatives (DPR) and cabinet. If approved, this law would somewhat change the role and power of the central bank (Bank Indonesia).
In essence, the Indonesian rupiah showed the same performance in 2024 as it did in the previous four years, namely it continued to weaken against the US dollar, albeit (the outlook for) interest cuts in the United States did cause a sharp, yet temporary, rebound in August 2024. Shortly after that rebound, the rupiah came under heavy pressures again, which continued into the last month of 2024.
For Indonesia’s currency and stock markets, November 2024 was not a good month. We saw some rupiah depreciation reappearing (against the US dollar) and a falling benchmark stock index (Jakarta Composite Index, or IHSG). What this means is that market participants are nervous. And in times of nervousness, Indonesian assets are typically the first victim as participants seek safe haven assets.
As expected, Bank Indonesia cut the benchmark interest rate at its monetary policy meeting on 17-18 September 2024. The BI rate was cut by 25 basis points (bps) to 6.00 percent, while also lowering the deposit facility and lending facility rates by 25 bps to 5.25 percent and 6.75 percent, respectively.
When global markets became really confident that the US Federal Reserve would cut its benchmark interest rate in September 2024, there occurred a sort of relief rally that is visible in Chart A below. Amid the increase in risk appetite, Indonesian stocks and the rupiah rate strengthened. Chart A shows that this rally started in late-July or early August 2024.
Over the past month, expectations of a looming interest rate cut in the United States (US) have only grown. The US Federal Reserve is widely expected to start cutting its benchmark interest rate at its policy meeting scheduled for 17-18 September 2024. In fact, the question seems to be whether it’ll be a 0.25 or 0.50 percentage point cut.
It is very interesting to take a quick look at the conclusions drawn at the latest US Federal Reserve meeting (held on 30-31 July 2024), as these conclusions have a big impact on global financial markets, including the Indonesian rupiah rate (and even on monetary policy of Indonesia’s central bank, Bank Indonesia).
In line with our projection, the central bank of Indonesia (Bank Indonesia) decided to raise its benchmark interest rate by 25 basis points (bps) to 6.00 percent after its October 2023 monetary policy meeting (held on 18-19 October 2023). Meanwhile, it also raised its deposit facility and lending facility by 25 bps, each, to 5.25 percent and 6.75 percent, respectively.
The central bank of Indonesia (Bank Indonesia) kept its benchmark interest rate at 5.75 percent at the two-day policy meeting on 20-21 September 2023. The lender of last resort also kept its deposit facility and lending facility rates at 5.00 percent and 6.50 percent, respectively.
In line with expectations, the central bank of Indonesia (Bank Indonesia) kept its benchmark interest rate (BI 7-Day Reverse Repo Rate) at 5.75 percent after the two-day policy meeting on 15-16 February 2023. It also kept its deposit facility and the lending facility at 5.00 percent and 6.50 percent, respectively.
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