ank Indonesia (BI) has increased its benchmark interest rate by 50 basis points (bps) to stabilize the rupiah, blaming the recent depreciation of the Indonesian currency on external pressure.
BI Governor Perry Warjiyo announced in a press conference on Wednesday that the decision was taken as “a further step to strengthen the stabilization of the rupiah exchange rate against the impact of heightened global volatility” triggered by the United States-Israeli war on Iran.
He added that the move was also a “preemptive measure” to keep inflation within the government’s target range of 2.5 plus/minus 1 percent in 2026 and 2027.
The 50-bps increase lifted the benchmark BI Rate to 5.25 percent from 4.75 percent, where it had remained unchanged since September 2025.
“This decision is in line with a pro-stability focus of monetary policy in 2026 to strengthen the resilience of Indonesia’s economy to global shocks,” Perry said.
The rupiah strengthened on the news, rising to around 17,600 against the US dollar after touching 17,800 earlier in the day, a record low.
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