Bank Indonesia holds benchmark rate, raises overnight deposit rate
The central bank also plans to lower reserve requirements in November and December, with the rupiah trading near its record low.
Bank Indonesia left its benchmark interest rate at 5.75 per cent on Oct 21, 2026, while increasing the overnight deposit rate to 5 per cent, a rise of 25 basis points. The decision followed sharp losses in Indonesian equities and renewed pressure on the rupiah.
Governor Destry Damayanti said commercial banks would face lower reserve requirements through staged reductions in November and December. The central bank also offered incentives for certain hedging transactions, aimed at drawing foreign inflows and supporting the currency. Its lending facility rate stayed at 6.5 per cent.
The benchmark decision matched the forecasts of 15 economists in a Reuters survey of 29 respondents conducted from Oct 13 to 19. Of the others, 13 anticipated an increase of 25 basis points and one expected a 50-basis-point rise. Bank Indonesia had raised rates by 100 basis points across three decisions in May and June to defend the rupiah, before holding them steady.
The rupiah traded 0.06 per cent lower after the announcement, taking its loss against the US dollar this year to more than 7 per cent. Indonesian shares had suffered a record two-day sell-off on Friday and Monday after MSCI warned that it could reclassify the country's equities as a standalone market.
