Indonesia Macro Update - BI Rate Update 19 Jun 2026
KBVS MACRO UPDATE
Friday, 19 June 2026
BI’s Continued Tightening Reinforces Pro-Stability Commitment
Bank Indonesia (BI) decided to raise the BI Rate by 25 basis points to 5.75%, marking its third consecutive hike since May '26 and reaffirming a decisive pro-stability monetary policy stance. BI's latest measures indicate a deliberate effort to preserve liquidity conditions and sustain credit growth despite a higher interest rate environment.
Going forward, we expect BI to maintain its pro-stability stance, with room for an additional 50 bps of tightening (2x25 bps) through year-end. Such a path, however, would likely depend on several key conditions: (i) Rupiah stabilization proving durable as seasonal dividend repatriation and external debt servicing pressures ease after June; (ii) foreign portfolio inflows into SRBI and SBN turning consistently positive on a weekly basis; and (iii) clearer de-escalation of Middle East geopolitical tensions following the 14 Jun '26 US-Iran interim deal.
Regards,
Fikri C Permana & Khairunnisa N Syahfiraputri - KBVS Research Team