Indonesia Raises Interest Rates to Support Rupiah Stability and Economic Growth

Indonesia Raises Interest Rates to Support Rupiah Stability and Economic Growth

INDONESIA: Bank Indonesia has increased its benchmark interest rate by 25 basis points to 5.75% to strengthen the rupiah and keep inflation within its 2026–2027 target amid heightened global uncertainty caused by the Middle East conflict. Alongside tighter monetary policy, the central bank will maintain supportive macroprudential measures and expand digital payment initiatives to encourage lending, investment and economic activity. Indonesia's economy continues to be supported by domestic demand, government spending and investment, with GDP growth forecast at 4.9–5.7% in 2026. The central bank also introduced measures to attract foreign investment, strengthen banking liquidity and improve financial stability, while reaffirming its commitment to sustaining economic growth despite ongoing external risks. 

Source: Bank Indonesia