Bank Indonesia (BI) decided to keep the BI-Rate at 5.75 percent at its Board of Governors meeting on 20–21 October 2026. The Deposit Facility rate was raised to 5.00 percent, while the Lending Facility rate stayed at 6.50 percent, according to a BI press release dated 21 October 2026.
Reserve requirement cut in stages
BI also lowered the rupiah reserve requirement (GWM). For conventional commercial banks it falls from 9 percent to 8 percent on 1 November 2026, then to 7 percent on 1 December 2026. For Islamic commercial banks and Islamic business units it falls from 7.5 percent to 6.5 percent on 1 November, then to 5.5 percent on 1 December. The macroprudential liquidity incentive (KLM) is also reduced from 6 percent to 5 percent from 1 December.
Reasons: the rupiah and inflation
BI said the policy aims to keep inflation within its 2.5±1 percent target in 2026 and 2027 and to stabilise the rupiah amid external pressure, including tensions in the Middle East and tighter US monetary policy. On 20 October 2026 the rupiah stood at Rp17,985 per US dollar, down 0.61 percent from the end of September.
Supporting figures
Headline inflation (CPI) in September 2026 was 3.28 percent year on year, up from 3.19 percent in August. Foreign exchange reserves at the end of September 2026 were US$146.3 billion, and bank lending grew 13.26 percent year on year in September.
