Indonesia’s Central Bank Keeps Main Rate Unchanged, Hikes Deposit Facility Rate
The central bank kept its benchmark rate at 5.75% and raised the deposit facility rate by 25 basis points as markets sold off.
- On Wednesday, October 21, 2026, Bank Indonesia held its benchmark 7-day reverse repurchase rate at 5.75% while hiking its overnight deposit facility rate by 25 basis points to 5%.
- Amid a record-breaking two-day stock market rout, the central bank acted after the rupiah fell nearly 1% following MSCI's warning it may reclassify Indonesia from "emerging markets" to "standalone" status.
- Jakarta's benchmark stock index plunged 11.6% on Friday, its worst one-day fall since January 1998, though headline inflation remained contained at 3.28%, within the central bank's target range of 1.5% to 3.5%.
- Lavanya Venkateswaran, senior ASEAN economist at OCBC Bank, noted that maintaining IDR stability remains a clear priority for policymakers, though analysts remain divided on the necessity of further hikes.
- While some economists expect the key rate to rise to 6.00% or more before year-end, Miguel Chanco, chief emerging Asia economist at UK-based Pantheon Macroeconomics, cautioned it is "far too early to suggest" recent market news necessitates further tightening.
16 Articles
16 Articles
Bank Indonesia (BI) has unexpectedly maintained its basic interest rate by 5.75% per year for the fourth consecutive meeting, on Wednesday (21), contrary to expectations of a 25-basis increase (bps). BI has reduced bank bonds from 9% to 7% for conventional banks, and from 7.5% to 5.5% for Islamic banks. However, the central bank has maintained its focus on keeping inflation within its target, while supporting GDP growth. BI has raised the rates …
On the other hand, BI raised the Deposit Facility interest rate from 4.75 percent to 5 percent.
REPUBLIKA.CO.ID, JAKARTA — Senior Technical Analyst at Mirae Asset Sekuritas Indonesia, M Nafan Aji Gusta, said that the rebound in the Jakarta Composite Index (JCI) was triggered by investors...
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