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No. 28/142/DKom  

Bank Indonesia Board of Governors' Meeting agreed on 21st-22nd July 2026 to hold the BI-Rate at 5.75%, while also maintaining the Deposit Facility (DF) rate at 4.75%, and the Lending Facility (LF) rate at 6.50%. Bank Indonesia is expanding its incentive policy and introducing several additional measures to increase foreign portfolio inflows, strengthen Rupiah exchange rate stability, accelerate money market and foreign exchange market deepening, as well as increase liquidity and reduce liquidity segmentation in the money market and banking industry. The latest BI-Rate decision and accompanying policy measures form an integrated part of the Bank Indonesia policy mix, which remains consistent with efforts to further strengthen Rupiah stability amid persistently elevated global uncertainty, while maintaining inflation within the Government's target corridor of 2.5±1% in 2026 and 2027 (pro-stability). 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 also remains oriented towards supporting economic 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 supporting sustainable economic growth, is further bolstered through the following policy measures:

1. Strengthening the effectiveness of monetary policy implementation to stabilise the Rupiah exchange rate and maintain inflation within the 2.5±1% target range in 2026 and 2027 by:
   1. optimising the foreign exchange intervention strategy to strengthen Rupiah exchange rate stabilisation efforts 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. managing the interest rate structure in the money market in line with the BI-Rate and pro-market monetary operation instrument rates, 
   3. ensuring adequate liquidity in the money market and banking industry by maintaining primary money growth above 10% (double digit), consistent with monetary expansion.
2. Expanding the incentive policy to increase portfolio inflows, strengthen Rupiah exchange rate stability and accelerate money market and foreign exchange market deepening by:
   1. increasing and expanding premium reduction incentives for foreign portfolio investment by: (a) raising the incentive for Swap Sell Hedging (Swap Buy Hedging to Bank Indonesia) from 10% to 12.5%, and (b) extending incentives for DNDF Sell Hedging transactions by 15%,
   2. providing incentives to increase Local Currency Transactions (LCT) with partner countries^[1] to diversify foreign exchange transactions through: (a) an additional 10% premium for Swap Buy Hedging (Swap Sell Hedging to Bank Indonesia), and (b) a 10% reduction in premiums for DNDF Sell Hedging transactions (Appendix 1).
3. Expanding liquidity and addressing liquidity segmentation in the money market and banking industry through refinements to the Macroprudential Liquidity Incentive Policy (KLM) and its integration with accelerated money market deepening as follows:
   1. ​expanding the underlying assets eligible for repo transactions in conventional monetary operations and/or Bank Indonesia Sharia-Based Liquidity Facility (PASBI) by including corporate bonds and/or sukuk issued by PT Sarana Multi Infrastruktur (SMI) and PT Sarana Multigriya Finansial (SMF). These securities meet the eligibility requirements for corporate bonds and/or sukuk issued by government-established or state-owned financial institutions in line with the Money Market Deepening Blueprint (BPPU) 2030. This policy will be implemented no later than the end of September 2026; 
   2. refining KLM policy to expand liquidity and reduce liquidity segmentation, while continuing to encourage lending to priority sectors by:
      1. increasing the maximum total KLM incentive available to banks from 5.5% to 6.0% of third-party funds (TPF), 
      2. adjusting the allocation of the KLM financing channel for bank lending/financing to priority sectors from a maximum of 4.5% of TPF to a maximum of 4.0% of TPF, 
      3. introducing macroprudential liquidity incentive policy for money market deepening (KLM PPU) allocation to overcome liquidity segmentation in the money market and banking industry, while simultaneously accelerating money market deepening, of up to 2.0% of TPF for banks that maintain securities holdings at the optimal ratio determined by Bank Indonesia. This PPU KLM allocation replaces the KLM interest rate channel and financing-to-funding channel, and 
      4. the strengthened KLM policy will take effect from 1^st September 2026 (Appendix 2).
4. Strengthening the Inclusive Macroprudential Financing Ratio (RPIM) Policy to encourage bank lending/financing to inclusive and sustainable sectors, while maintaining prudential principles through 3 (three) modalities:
   1. expanding the scope of bank lending/financing to include suppliers, distributors and/or business partners of corporate entities to support inclusive sectors and national economic growth,
   2. expanding interbank cooperation mechanisms for MSME lending through channelling and executing schemes,
   3. strengthening the contract-based interbank RPIM transfer mechanism, and 
   4. the strengthened RPIM policy will take effect from 1^st October 2026.
5. Expanding payment system digitalisation to support and strengthen household purchasing power, while continuing to nurture innovation in line with sound risk management and payment system stability by:
   1. expanding digital payment acceptance through the development of payment instruments and channels, as well as expanding QRIS Cross-Border linkages with priority partner countries, 
   2. strengthening innovation and entrepreneurship by intensifying business matching at the Indonesian Digital Innovation Centre (PIDI) Digdaya and the Hackathon program to develop national digital talent, and 
   3. strengthening payment system industry restructuring through the development of activities, products and/or partnerships that meet risk management requirements and are aligned with Bank Indonesia's policy direction. 

In addition, Bank Indonesia continues strengthening policy coordination with the Government, including close synergy between monetary and fiscal policy to mitigate the impact of global uncertainty on the domestic economy, thereby maintaining economic stability and growth. Policy synergy with the Financial System Stability Committee (KSSK) is also being strengthened to help safeguard financial system stability and encourage financing for the Government's Asta Cita program. Synergy with the Government and other stakeholders to foster bank lending/financing is being pursued through the Indonesian Intermediation Acceleration Program (PINISI). 

Global uncertainty is intensifying again following a re-escalation of the war between the United States (US) and Iran in early July 2026. Shipping through the Strait of Hormuz has again been disrupted, affecting production and international supply chains, while oil prices and various global commodity prices have reversed course and are increasing. Global economic growth in 2026 is projected to remain sluggish at 3.0%, while global inflation is expected to rise to around 4.5%. Global monetary policy has tightened in response to a build-up of inflationary pressures. The US monetary policy rate, the Federal Funds Rate (FFR), is expected to increase sooner, namely in the fourth quarter of 2026. US Treasury yields have also risen significantly, reaching 4.56% for the benchmark 10-year tenor and 4.18% for the 2-year tenor on 20^th July 2026, and are projected to increase further, driven by the widening US fiscal deficit. In global financial markets, capital outflows from emerging markets (EM) have shifted towards US financial markets and high-yield, safe-haven assets, strengthening the US dollar against both advanced economy currencies (DXY) and emerging market currencies (ADXY). The renewed increase in global economic and financial uncertainty demands stronger policy responses and closer fiscal-monetary policy synergy to bolster external resilience, maintain stability and support domestic economic growth. 

At home, economic growth in Indonesia remains resilient, underpinned by domestic demand. Second-quarter performance this year indicates that Government consumption grew strongly, supported by the continued implementation of priority programs and accelerated Government spending, particularly the disbursement of 13^th-month salaries for civil servants and social assistance to beneficiary families. Household consumption has remained resilient, supported by various Government stimulus measures, including food assistance, discounted transportation fares, as well as national internship and vocational training programs. Investment has primarily been supported by investment in buildings associated with the implementation of the National Priority Work Program (PKPN), while private investment must be strengthened further. Externally, export performance requires continued strengthening to capitalise on rising international commodity prices amid the moderating global economic outlook. By sector, growth in the Manufacturing Industry, Construction, as well as Transportation and Storage sectors remains robust in line with the implementation of Government programs. Moving forward, implementation of the Government's various priority programs to strengthen domestic demand as a source of economic growth and reinforce the structure of economic growth will continue to be optimised. In line with these efforts, Bank Indonesia will continue strengthening its policy mix through monetary, macroprudential and payment system policies, working in close synergy with Government policies to maintain stability, while supporting sustainable economic growth. Bank Indonesia projects national economic growth to remain within the 4.9-5.7% range in 2026. 

Indonesia's Balance of Payments (BOP) performance needs to be strengthened further to mitigate the spillover effects of heightened global uncertainty. Indonesia's trade balance recorded a cumulative surplus of USD4.03 billion from January-May 2026, despite posting a USD1.61 billion deficit in May 2026. In terms of the capital and financial account, the stronger monetary policy response instituted by Bank Indonesia, in close synergy with the fiscal policy of the Government to strengthen yields on domestic financial instruments, has sustained foreign capital inflows. Foreign portfolio investment recorded net inflows of USD8.5 billion in the second quarter of 2026, driven primarily by Government Securities (SBN) and Bank Indonesia Rupiah Securities (SRBI). This trend continued into the third quarter of 2026 (as of 20^th July 2026), supported primarily by Government Securities (SBN), which recorded net inflows of USD0.1 billion. Indonesia's reserve assets remained strong at USD145.6 billion at end-June 2026, equivalent to 5.5 months of imports or 5.4 months of imports and servicing Government external debt, which is well above the international adequacy standard of approximately three months of imports. Moving forward, Bank Indonesia projects the current account deficit to remain healthy within the range of 1.3% to 0.5% of GDP in 2026. Stronger policy synergy between the Government and Bank Indonesia will continue to bolster the external resilience of the national economy, while strengthening Rupiah exchange rate stability against a backdrop of global financial market volatility. 

Bank Indonesia continues strengthening Rupiah exchange rate stabilisation policy by optimising a broad range of policy instruments. The Rupiah appreciated to Rp17,885 per US dollar on 21^st July 2026, after experiencing temporary pressure from the end of June 2026 following the renewed escalation of the war in the Middle East and stronger market expectations of a hike in the Federal Funds Rate (FFR). Accordingly, the Rupiah remained relatively stable against the US dollar compared with its level of Rp17,880 at end-June 2026. Maintaining Rupiah exchange rate stability, Bank Indonesia continues to optimise intervention in both the offshore Non-Deliverable Forward (NDF) market as well as the domestic spot and Domestic Non-Deliverable Forward (DNDF) markets. SRBI rates have been raised to attract portfolio inflows and strengthen Rupiah exchange rate stability. Non-resident holdings of SRBI increased from Rp238.09 trillion on 15^th June 2026 to Rp288.65 trillion, equivalent to 27.11% of total SRBI outstanding, on 20^th July 2026. In addition, Bank Indonesia continues optimising the full range of monetary instruments and provides a 10% reduction in hedging swap rates for foreign investors to further attract foreign capital inflows, while compensating for obligations currently borne by investors. Bank Indonesia has also expanded its foreign exchange monetary operationnvestment associated with the implementation of the National Priority Wo instruments to include offshore Chinese renminbi (CNH)-Rupiah spot and swap transactions in line with the broader use of Local Currency Transactions (LCT) for the settlement of trade and investment transactions. Moving forward, Bank Indonesia will continue expanding its incentive policy to attract foreign capital inflows and strengthen Rupiah exchange rate stability. Bank Indonesia is confident that the Rupiah will remain stable and continue its appreciating trend, supported by Bank Indonesia's firm commitment to strengthening Rupiah exchange rate stabilisation, attractive investment yields, and Indonesia's promising economic growth outlook. 

Consumer Price Index (CPI) inflation remained within the target range set by the Government. CPI inflation in June 2026 was recorded at 3.34% (yoy), slightly higher than 3.08% (yoy) in the previous month. This was influenced by core inflation, which was well contained at 2.76% (yoy) thanks to policy consistency by Bank Indonesia to maintain inflation within the target range. Administered prices (AP) inflation increased to 3.42% (yoy) following adjustments to the prices of non-subsidised fuel and aviation fuel amid elevated global energy prices. Meanwhile, volatile food (VF) inflation was recorded at 5.58% (yoy), driven primarily by higher prices of shallots, garlic and rice, reflecting lower production in key producing regions, higher transportation costs and the end of the main harvesting season. Moving forward, Bank Indonesia will continue strengthening its monetary policy mix and enhancing synergy with both the Central and Regional Governments to maintain inflation within the 2.5±1% target range in 2026 and 2027. Coordination with the Government is being strengthened through the Central and Regional Inflation Control Teams (TPIP/TPID) by bolstering the implementation of the National Inflation Control Movement for Food Security (GPIPS), including measures to anticipate the risks posed by inclement weather conditions (El Niño) to food prices. 

Bank Indonesia continues strengthening policies to maintain adequate liquidity in the money market, banking industry and economy. To that end, Bank Indonesia continues to open repurchase agreement (repo) auction windows for the banking industry across the 3, 6, 9 and 12-month tenors, while purchasing Government Securities (SBN), which in 2026 (as of 21^st July 2026) totalled Rp188.68 trillion, including Rp76.62 trillion of secondary-market purchases. These measures maintained primary money (M0) growth at the high double-digit rate of 14.1% (yoy) in June 2026. By component, M0 growth in June 2026 was primarily influenced by currency in circulation, which grew by 14.0% (yoy), and commercial bank demand deposits at Bank Indonesia, which grew by 12.7% (yoy). In terms of the affecting factors, M0 growth in June 2026 was influenced by Bank Indonesia monetary operations and fiscal expansion by the Government, including the placement of Government funds in the banking industry. Accordingly, broad money (M2) grew by 10.8% (yoy) in May 2026, up from 9.2% (yoy) in the previous period. In terms of the affecting factors, M2 growth was primarily driven by disbursed loans and Net Foreign Assets (NFA). Moving forward, Bank Indonesia will continue strengthening various measures to maintain adequate liquidity in the money market, banking industry and economy, thereby preserving stability and supporting economic growth. 

Bank Indonesia is maintaining an accommodative macroprudential policy stance by optimising the Macroprudential Liquidity Incentive Policy (KLM) to boost bank lending/financing to priority sectors. As of the first week of July 2026, the KLM incentives received by banks amounted to Rp431.9 trillion, comprising Rp369.0 trillion allocated through the lending channel and Rp62.9 trillion through the interest rate channel. By bank group, the KLM incentives received by state-owned banks totalled Rp219.6 trillion, with Rp172.5 trillion allocated to national private commercial banks, Rp31.7 trillion to regional development banks and Rp8.1 trillion to foreign bank branches. By sector, the incentives were disbursed to priority sectors, including 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. Moving forward, Bank Indonesia will continue strengthening accommodative macroprudential policy implementation, which includes strengthening KLM policy to support money market deepening, as well as the Macroprudential Intermediation Ratio (RIM) and Bank Foreign Funding Ratio (RPLN), which banks have utilised since 1^st July 2026 to increase funding flexibility and continue supporting bank lending/financing. Coordination with the Government, the Financial System Stability Committee (KSSK) and the banking industry will also be strengthened to maintain liquidity resilience and nurture bank lending/financing growth. 

The role of bank lending in supporting economic growth continues to increase. Growth of outstanding loans disbursed by the banking industry in June 2026 was recorded at 12.67% (yoy), accelerating from 11.51% (yoy) in May 2026. By loan type, credit growth was supported by investment loans, working capital loans and consumer loans, which grew in June 2026 by 24.90% (yoy), 8.94% (yoy) and 5.75% (yoy), respectively. Bank Indonesia projects credit growth in 2026 to remain within the 8-12% range. On the demand side, this outlook is supported by the sizeable undisbursed loan facilities totalling Rp2,490 trillion, equivalent to 21.52% of available credit lines, the realisation of which must continue to be encouraged to support economic financing. On the supply side, lending appetite in the banking industry also remains strong, supported by persistently high third-party funds (TPF) growth of 10.21% (yoy). In addition, the performance of bank interest rates is expected to support credit growth, which includes publication of the assessment of prime lending rate (PLR) transparency (Appendix 3). The 1-month term deposit rate was recorded at 4.76% in June 2026, while the lending rate stood at 8.81%. 

Banking sector resilience remains solid, thereby mitigating the impact of global uncertainty on the financial system. This is indicated by persistently high capital capacity, low credit risk and ample banking industry liquidity. The Capital Adequacy Ratio (CAR) of the banking industry in May 2026 was recorded high at 23.74%, indicating strong capacity to absorb risk and support credit growth. As an aggregate, Non-Performing Loan (NPL) ratios in the banking industry remained low at 2.17% (gross) and 0.84% (net) in May 2026. Meanwhile, the Liquid Assets to Third-Party Funds (LA/TPF) ratio of the banking industry stood at 23.08% in June 2026, down from 24.74% in May 2026. The results of Bank Indonesia's stress tests indicate that banking resilience remains solid in the face of various risks, including the spillover effects from the ongoing war in the Middle East, supported by maintained corporate repayment capacity and profitability. Moving forward, Bank Indonesia will continue strengthening macroprudential policy and policy synergy with KSSK to help maintain financial system stability, which includes maintaining adequate liquidity and mitigating interbank liquidity segmentation. 

Digital economic and financial transactions continued to grow in the second quarter of 2026, underpinned by secure, seamless and reliable payment systems to support economic activity. Digital payment^[2] transaction volume reached 16.07 billion transactions in the second quarter of 2026, growing by 36.88% (yoy), supported by broader acceptance of digital payments. Transaction volumes through internet and mobile applications grew by 16.88% (yoy) and 31.39% (yoy), respectively, including QRIS transactions, which continued to enjoy robust growth of 100.12% (yoy) in the second quarter of 2026. Positive QRIS performance was supported by increasing numbers of users and merchants. On the infrastructure side, retail transaction volumes processed through BI-FAST reached 1,529 million transactions, growing by 38.09% (yoy), with a transaction value of Rp3,777 trillion in the second quarter of 2026. Meanwhile, the volume of large-value (wholesale) transactions processed through BI-RTGS was recorded at 2.63 million transactions, growing by 13.03% (yoy), with BI-RTGS transaction value growing by 12.66% (yoy) to Rp53,492 trillion in the second quarter of 2026. In terms of Rupiah currency management, currency in circulation grew by 14.03% (yoy) to Rp1,315 trillion in the second quarter of 2026.

Payment system stability was preserved, supported by stable infrastructure and a sound industry structure. Stable infrastructure is reflected in the seamless and reliable operation of the Bank Indonesia Payment System (SPBI) and industry payment systems, as well as an adequate supply of currency in sufficient quantity and quality. A sound industry structure is reflected in stronger interconnection among payment system participants, accompanied by an expanding digital economy and finance ecosystem. Moving forward, Bank Indonesia will continue strengthening the payment system industry structure, particularly by ensuring that the development of activities, products and/or partnerships meets risk management requirements and remains aligned with Bank Indonesia's policy direction. Bank Indonesia will also continue safeguarding the security and reliability of SPBI infrastructure, both retail and wholesale, as well as industry payment system infrastructure. Moreover, Bank Indonesia will continue maintaining the availability of Rupiah currency in sufficient quantity and fit for circulation throughout the territory of the Republic of Indonesia, including frontier, outermost and remote (3T) areas.

Jakarta, 22^nd July 2026
Communication Department
Ramdan Denny Prakoso
Executive Director 

^[1] To date, Bank Indonesia has implemented LCT schemes with six partner countries, namely Malaysia, Thailand, China, Japan, South Korea, and the United Arab Emirates.

^[2] Digital payments consist of transactions through mobile and internet applications.