Stays on hold as Middle East escalation delays easing path
Bank Indonesia (BI) kept its policy rate at 4.75% at its third Board of Governors meeting of 2026, marking the fifth straight month of policy pause, in line with our view and market expectations
- Deposit and Lending Facility Rates were also maintained at 3.75% and 5.50%, respectively.
- BI statement: BI noted that its latest decision aims to “strengthen the stability of the Rupiah exchange rate from the impact of worsening global conditions due to the war in the Middle East and to maintain the 2026-2027 inflation target of 1.5%-3.5%.” It also reiterated that it will take “necessary adjustment measures to remain consistent in maintaining national economic stability” signalling its continued focus on maintaining stability while supporting growth.
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