Bank Indonesia says rates need not follow potential Fed increases
Governor Destry Damayanti said domestic inflation and economic activity would help determine policy as BI monitors possible US rate rises.
Bank Indonesia is monitoring the possibility of US Federal Reserve interest rate increases in December 2026 and into 2027, but would not automatically match them, Governor Destry Damayanti said. Indonesia’s economic conditions, inflation and rupiah stability would guide its decisions.
Speaking at Kadin’s national leadership meeting in Jakarta on 29 October 2026, Destry said global interest rates were an important consideration for monetary policy because Fed moves could affect the rupiah and inflation. Any response would depend on the objectives BI sought to achieve, she said.
Destry described Indonesian inflation as relatively contained at 3.28 per cent, within BI’s target of 2.5 per cent plus or minus 1 per cent, or 1.5–3.5 per cent. Core inflation stood at 2.8 per cent. BI’s assessment showed economic activity remained below capacity, leaving room for growth without excessive inflationary pressure, she said.
BI had already taken preventive steps against exchange-rate pressure, Destry said, raising interest rates by 100 basis points in May and June to support rupiah stability. She described the approach as forward-looking, with a longer-term focus on anchoring inflation and the exchange rate.
