The Bank Indonesia Board of Governors agreed on 19-20th May 2026 to increase the BI-Rate by 50 bps to 5.25%, while also raising the Deposit Facility (DF) rate by 50 bps to 4.25% and the Lending Facility (LF) rate by 50 bps to 6.00%. The increase represents a further measure to strengthen Rupiah exchange rate stabilisation efforts against the impact of heightened global turmoil triggered by the war in the Middle East, as well as a pre-emptive measure to maintain inflation within the target corridor of 2.5±1% in 2026 and 2027 set by the Government. The decision is consistent with the current pro-stability focus of monetary policy to strengthen external resilience against the impact of global headwinds. Meanwhile, macroprudential policy and payment system policy remain directed towards supporting growth (pro-growth). Bank Indonesia continues strengthening accommodative macroprudential policy to support economic growth by increasing lending/financing to the real sector, while maintaining financial system stability. Payment system policy remains oriented towards inclusive digital economic and financial activity through broader acceptance of digital payments, strengthening the payment system industry structure, as well as enhancing the reliability and resilience of payment system infrastructure.

The direction of the monetary, macroprudential and payment system policy mix to strengthen stability, while also supporting sustainable economic growth, is also supported by the following policy measures:

1. Strengthening the effectiveness of monetary policy implementation to preserve Rupiah exchange rate stability and maintain inflation in 2026 and 2027 within the 2.5%±1% target range by:
1. increasing the intensity of foreign exchange intervention to strengthen Rupiah stabilisation through Non-Deliverable Forward (NDF) transactions in offshore markets as well as spot and Domestic Non-Deliverable Forward (DNDF) transactions in the domestic market,
2. strengthening the interest rate structure of pro-market monetary instruments in line with the BI-Rate to continue attracting foreign portfolio investment inflows to domestic financial assets, and
3. maintaining primary money growth above 10% (double digit), consistent with monetary expansion, to ensure adequate liquidity in the money market and banking industry, including through measured secondary market transactions of government securities (SBN).
2. Strengthening accommodative macroprudential policy to enhance liquidity management flexibility and stimulate banking intermediation, including non-credit financing and non-TPF funding, while maintaining financial system stability by:
1. easing the Macroprudential Intermediation Ratio (RIM) by expanding the scope and strengthening the criteria of corporate securities/sharia securities held and issued by banks used as the basis for calculating RIM, effective from 1st July 2026 (Appendix 1),
2. enhancing Macroprudential Liquidity Incentive Policy (KLM) by providing additional incentives of up to 0.5% of third-party funds (TPF) for banks that fulfil the RIM range determined by Bank Indonesia with unrealised KLM incentives up to 5.5%, effective from 1st August 2026 (Appendix 2),
3. strengthening further synergy with the Government and other stakeholders to stimulate lending/financing from both the supply side in the banking industry and the demand side in the corporate sector through the Indonesian Intermediation Acceleration Program (PINISI),
4. publishing the assessment of prime lending rate (PLR) transparency, with a focus on interest rates based on priority sectors in accordance with the scope of KLM policy (Appendix 3).
3. Strengthening implementation of payment system digitalisation measures in accordance with the Indonesia Payment System Blueprint (BSPI) 2030 to further expand inclusive digital economic and financial activities by:
1. expanding the QRIS Jelajah Indonesia 2026 program, targeting 47 million QRIS merchants in 2026, to strengthen inclusive digital economic and financial activity, including MSMEs,
2. implementing QRIS Cross-Border between Indonesia and China to expand cross-border digital payment connectivity following the successful QRIS connectivity initiatives with Malaysia, Singapore, Thailand, Japan and South Korea,
3. implementing the Indonesian Digital Innovation Centre (PIDI): Digdaya and Hackathon through advanced training programs to further expand the creation of inclusive digital business entrepreneurship in financial services, MSMEs and public services as new sources of economic growth and job creation.
4. Strengthening foreign exchange market transaction policy by lowering the threshold for cash purchases of foreign exchange against the Rupiah without underlying transactions to USD25,000 per person per month, effective from June 2026, to support Rupiah stability and deepen domestic financial markets.
5. Strengthening measures to deepen the money and foreign exchange markets in accordance with the Money Market and Foreign Exchange Market Development Blueprint (BPPU) 2030 to support rupiah stability by:
1. ​further expanding transactions in offshore Chinese Renminbi (CNH) currency against the Rupiah through spot and swap instruments in the domestic foreign exchange market, in line with the growing use of local currency transactions (LCT) for trade and investment settlement, and
2. expanding banking participation in offshore NDF foreign exchange selling transactions against the Rupiah in offshore markets for Primary Dealers that meet Bank Indonesia requirements.
6. Strengthening the oversight of banks and corporations with high US dollar purchasing activity through close coordination with the Financial Services Authority (OJK).
7. Expanding international cooperation in central banking areas, including payment system connectivity and local currency transactions, while facilitating investment and trade promotion in priority sectors in cooperation with relevant institutions. 

​Heightened global turmoil due to the conflict in the Middle East has worsened global economic conditions. The closure and blockade of the Strait of Hormuz have triggered a sharp spike in global oil prices. Disruptions to global production, distribution and supply chains have also edged up other international commodity prices. In response, global monetary policy has tightened, with several central banks beginning to hike policy rates. US Treasury yields increased to 4.66% (10-year tenor) and 4.11% (2-year tenor) as of 19th May 2026. In global financial markets, deteriorating international conditions have perpetuated capital outflows from various countries, including emerging markets, towards safe-haven assets, particularly US bonds. This has strengthened the US dollar index and triggered a build-up of depreciatory pressures on both advanced economy currencies (DXY) and emerging market currencies (ADXY). The deterioration in global economic and financial conditions necessitates a stronger fiscal and monetary policy response, accompanied by synergy to strengthen external resilience, maintain stability, and support domestic economic growth. 

The momentum of stronger Indonesia's economic growth needs to be maintained. Economic growth accelerated from 5.39% (yoy) in the fourth quarter of 2025 to 5.61% (yoy) in the first quarter of 2026, underpinned by domestic demand. Household consumption increased due to greater community mobility during the national religious holiday period and the positive impact of various Government stimuli. Government consumption increased sharply, supported by spending on Government priority programs, particularly the Free Nutritious Meals program, as well as higher personnel expenditures through disbursements of the 14th salary or mandatory religious holiday allowance. Investment, particularly building investment, increased in line with the National Priority Work Program. On the other hand, exports declined due to global economic moderation. 

The performance of Indonesia's Balance of Payments (BoP) needs to be further strengthened amid the worsening global economy and financial market conditions. The goods trade surplus narrowed from USD7.6 billion in the fourth quarter of 2025 to USD5.5 billion in the first quarter of 2026. Meanwhile, capital flows in the first quarter of 2026 recorded net outflows of USD0.8 billion. Such developments necessitate stronger policy synergy between the Government and Bank Indonesia to ensure that BOP performance continues supporting external resilience, while strengthening Rupiah exchange rate stability amid the severe global turmoil caused by the conflict in the Middle East. Bank Indonesia raised the interest rates on Bank Indonesia Rupiah Securities (SRBI) to 6.21%, 6.31% and 6.45% for the respective tenors of 6, 9 and 12 months on 13^th May 2026. The various policy responses undertaken have attracted the return of foreign portfolio inflows in the second quarter of 2026, recording net inflows of USD5.5 billion (as of 18^th May 2026), primarily supported by inflows to SRBI and Government Securities (SBN) amid higher yields on both instruments. Indonesia's reserve assets at end-April 2026 remained well-maintained at USD146.2 billion, equivalent to 5.8 months of imports or 5.6 months of imports and servicing government external debt, which is well above the international adequacy standard of around 3 months of imports. 

Bank Indonesia continues strengthening Rupiah stabilization policy through various instruments in response to worsening global turmoil amid high seasonal domestic demand for foreign exchange. As previously noted, global headwinds are triggering capital outflows from emerging markets and strengthening the US dollar, thereby placing significant and broad-based depreciatory pressures on nearly all currencies, including the Rupiah. Domestically, the demand for foreign exchange in the second quarter of 2026 has increased considerably due to seasonal factors, including dividend payments and external debt servicing. To maintain Rupiah exchange rate stability, Bank Indonesia continues to intensify foreign exchange intervention, both through intervention in offshore NDF markets as well as spot and DNDF transactions in the domestic market. Bank Indonesia also strengthened the interest rate structure of monetary instruments by raising SRBI rates, as mentioned above, to attract portfolio inflows. Bank Indonesia is also strengthening foreign exchange market transaction policy through adjustments to the cash threshold for purchasing foreign currency against the Rupiah without underlying transactions, alongside higher thresholds for DNDF/Forward selling transactions, and higher thresholds for swap buying and selling transactions, effective from April 2026. In addition, Bank Indonesia further expanded foreign exchange MO instruments with offshore spot and swap instruments in Chinese renminbi (CNH) against the Rupiah to support Rupiah exchange rate stability and expand trade and investment transactions using local currency transactions (LCT).  The Rupiah exchange rate on 19^th May 2026 was recorded at Rp17,700 per US dollar, depreciating by 2.20% (ptp) compared with the level at end-April 2026. 

Consumer Price Index (CPI) inflation remained low. CPI inflation in April 2026 was recorded at 2.42% (yoy), lower than the 3.48% (yoy) realised in the previous period. Core inflation moderated to 2.44% (yoy), supported by consistent Bank Indonesia policy to anchor inflation expectations. Administered prices (AP) inflation decreased to 1.53% (yoy) given the end of the base effect of the electricity tariff discount policy introduced in 2025 as well as limited adjustments to administered prices. Volatile food (VF) inflation declined to 3.37% (yoy), impacted by the ongoing harvesting season at major production hubs alongside maintained food supply across various regions. 

Bank Indonesia continues strengthening its monetary policy response to maintain Rupiah exchange rate stability, manage inflation within the target corridor, and bolster economic stability. As explained above, Bank Indonesia continues strengthening Rupiah stabilization policy through intervention in offshore NDF markets and domestic markets through spot and DNDF transactions, as well as secondary-market purchases of Government Securities (SBN), underpinned by stronger foreign exchange market transaction policy and the expansion of foreign exchange MO instruments. The BI-Rate remains oriented towards maintaining consistency with efforts to strengthen Rupiah exchange rate stability and achieve the 2.5±1% inflation target in 2026 and 2027. This policy is supported by strengthening the interest rate structure strategy of monetary operation instruments through higher SRBI rates, as noted above, as part of the Rupiah stabilization efforts. Bank Indonesia also continues optimizing various pro-market monetary instruments to attract higher foreign capital inflows to the domestic market, thereby stabilising Rupiah exchange rates. The position of outstanding SRBI instruments on 18^th May 2026 stood at Rp921.88 trillion, with non-resident holdings increasing to Rp221.59 trillion (24.04% of total outstanding), thereby contributing to maintain Rupiah stability. To maintain adequate liquidity in the money market and banking industry while also reflecting the close synergy between monetary and fiscal policies, Bank Indonesia has also purchased SBN, which in 2026 (as of 19^th May 2026) amounted to Rp140.57 trillion, including Rp73.28 trillion in secondary-market purchases. Purchases of SBN in the secondary market are conducted in accordance with market mechanisms, in a measured and transparent manner, and consistent with the monetary program to maintain economic stability and preserve monetary policy credibility.

Money supply growth accelerated in line with the monetary liquidity expansion policy pursued by Bank Indonesia. Base money (M0) in April 2026 grew by 14.1% (yoy), up from 11.8% (yoy) in the previous month. By component, M0 growth in April 2026 was primarily influenced by commercial bank demand deposits at Bank Indonesia, which grew by 28.4% (yoy), as well as currency in circulation, which increased by 14.6% (yoy). In terms of influencing factors, M0 growth in April 2026 was driven by more expansionary monetary operations as well as higher demand for liquidity in the banking industry for dividend payments. Accordingly, broad money (M2) growth in March 2026 accelerated to 9.7% (yoy) from 8.7% (yoy) in the previous period. M2 growth was primarily influenced by net claims on central government (NCG) and disbursed loans.

Accommodative macroprudential policy continues to be pursued through the optimization of the Macroprudential Liquidity Incentive (KLM) policy to promote increased bank lending/financing to priority sectors. As of the first week of May 2026, the KLM incentives received by banks amounted to Rp424.7 trillion, comprising Rp361.0 trillion allocated through the lending channel and Rp63.7 trillion through the interest rate channel. By bank group, the KLM incentives received by state-owned banks totalled Rp214.2 trillion, with Rp171.1 trillion allocated to national private commercial banks, Rp30.6 trillion to regional development banks, and Rp8.2 trillion to foreign bank branches. By sector, the incentives were primarily disbursed to priority sectors, namely agriculture, manufacturing, and downstream sectors; services, including the creative economy, construction, real estate and housing; as well as the MSME, cooperatives, inclusive, and sustainable sectors. Bank Indonesia will continue strengthening KLM policy by providing incentives to banks that increase financing and funding, including non-credit financing and non-TPF funding, as well as to banks that set lending/financing rates in line with Bank Indonesia policy.  

The role of bank lending in supporting economic growth needs to be further strengthened. Bank lending in April 2026 grew by 9.98% (yoy), up from 9.49% (yoy) in March 2026. By loan type, credit growth was supported by investment loans, working capital loans and consumer loans, which in April 2026 grew by 19.48% (yoy), 6.04% (yoy) and 6.13% (yoy), respectively. Bank Indonesia projects credit growth in 2026 to remain within the range of 8–12%, supported by optimizing still sizeable undisbursed loan facilities totalling Rp2,551.42 trillion, equivalent to 22.57% of available credit lines, as well as adequate bank financing capacity, as reflected in the Liquid Assets to Third-Party Funds (LA/TPF) ratio of 25.39% and persistently solid TPF growth of 11.39% (yoy) in April 2026. Interest rate efficiency in the banking industry could also be improved further, with lending rates recorded at 8.73% and 1-month deposit rates at 4.16% in April 2026.

Banking system resilience remains strong in mitigating risks arising from the impact of the conflict in the Middle East. This is indicated by ample banking liquidity, persistently high capital capacity and low credit risk. The Capital Adequacy Ratio (CAR) of the banking industry in March 2026 remained high at 25.09%, indicating strong capacity to absorb risks and support credit growth. As an aggregate, Non-Performing Loan (NPL) ratios in the banking industry remained low at 2.14% (gross) and 0.83% (net) in March 2026. The results of Bank Indonesia's stress tests indicate that banking resilience remains strong in the face of various risks, including the impact of global spillovers from the war in the Middle East, supported by maintained corporate repayment capacity and profitability. Bank Indonesia will continue strengthening macroprudential policy and policy synergy with the KSSK to maintain financial system stability.

The growth of digital economic and financial transactions remained high in April 2026, supported by secure, seamless and reliable payment systems. Digital payment transaction^[1] reached 5.15 billion transactions, growing by 42.86% (yoy) in April 2026, supported by expanded digital payment acceptance. Transaction volumes through mobile and internet applications grew by 15.92% (yoy) and 22.95% (yoy), respectively, including QRIS transactions, which continued to post strong growth of 108.43% (yoy). This positive performance was supported by an increase in the number of users and merchants. On the infrastructure side, retail transaction volumes processed through BI-FAST reached 490 million transactions, growing 46.09% (yoy), with a transaction value of Rp1,219 trillion in April 2026. Meanwhile, the volume of large-value transactions processed through BI-RTGS was recorded at 0.91 million transactions, growing 25.72% (yoy), while transaction value increased by 14.55% (yoy) to Rp17,520 trillion in April 2026. In terms of Rupiah currency management, currency in circulation grew by 14.61% (yoy) to Rp1,301 trillion in April 2026.  

Payment system stability remained well maintained, supported by stable infrastructure and a sound industry structure. Stable infrastructure is reflected in the smooth and reliable operation of the Bank Indonesia Payment System (SPBI) and industry payment systems, as well as the adequacy of currency supply in sufficient quantity and quality. A sound industry structure is reflected in the strengthening interconnections among participants in the payment system, accompanied by the expansion of the Digital Economy and Finance (EKD) ecosystem. Moving forward, Bank Indonesia will continue strengthening the payment system industry structure, particularly risk management and the reliability of industry participants' technology infrastructure, in accordance with the implementation of Bank Indonesia Regulation No. 10 of 2025 on Payment System Industry Regulation (PBI PISP). Bank Indonesia will continue to ensure the security and reliability of SPBI infrastructure, both retail and wholesale, as well as industry payment system infrastructure. Bank Indonesia also continues to ensure the availability of Rupiah currency in sufficient quantities and fit-for-circulation quality throughout the territory of the Republic of Indonesia, including frontier, outermost, and remote (3T) areas.

The prospect of the global economy is weaker while the global inflationary pressures are escalating. Global economic growth outlook for 2026 is projected lower to 3.0%, while global inflationary pressures escalate to around 4.3%. Global monetary policy response has tightened and there is a possibility that the Federal Funds Rate (FFR) will rise in 2027 amid persistently high inflation in the US. Furthermore, US Treasury yields are expected to rise further amid the widening US fiscal deficit.

From the domestic side, economic growth is expected to remain solid. The prospect is supported by optimized Government spending in synergy with the Bank Indonesia policy mix, including accommodative macroprudential policy and payment system policy to support inclusive digital economic and financial activity. Bank Indonesia forecasts national economic growth in 2026 within the 4.9-5.7% range.

The performance of Indonesia's Balance of Payments (BoP) needs to be further strengthened amid the worsening global economy and financial market conditions. Bank Indonesia projects the current account deficit in 2026 within the range of 1.3% to 0.5% of GDP. Stronger policy synergy between the Government and Bank Indonesia is required, therefore, to strengthen the capital and financial account surplus, thereby maintaining external resilience, while strengthening Rupiah exchange rate stability against the global turmoil.

Bank Indonesia will continue to strengthen policies to maintain Rupiah exchange rate stability. Bank Indonesia is confident that the Rupiah will remain stable and trend towards appreciation, supported by Bank Indonesia's firm commitment, attractive yields, and Indonesia's promising economic outlook.

The outlook for CPI inflation in 2026 and 2027 remains within the range of 2.5±1%, although the impact of rising global commodity prices needs to be anticipated. Surging global oil prices and increases in other commodity prices caused by global turmoil could affect domestic prices and inflationary pressures. In addition to imported inflation, inflationary pressures could also stem from increases in administered prices, including higher non-subsidised energy prices. Alongside Rupiah stabilization measures, therefore, Bank Indonesia will continue strengthening the monetary policy mix to contain inflation within the 2.5±1% target corridor in 2026 and 2027. Bank Indonesia will also continue strengthening synergy with the Government through the Central/Regional Inflation Control Teams (TPIP/TPID) by bolstering implementation of the Inflation Control and Food Prosperity Movement (GPIPS).

Bank Indonesia projects credit growth in 2026 to remain within the range of 8–12%. This outlook is supported by the still large amount of undisbursed loans, adequate bank financing capacity, and deposits that continue to grow strongly. Banking interest rate efficiency can also be further improved. Moving forward, Bank Indonesia will continue strengthening the implementation of accommodative macroprudential policy, which includes strengthening the Macroprudential Intermediation Ratio (RIM) and KLM policy, to continue supporting bank lending/financing. Coordination with the Government and the Financial System Stability Committee (KSSK) will also continue to be strengthened to improve the interest rate structure and promote bank lending/financing growth.

^[1] Digital payments include transactions through mobile applications and the internet.