Bank Indonesia holds the benchmark rate at 5.75 per cent
Bank Indonesia left the 7-day reverse repo rate at 5.75 per cent, with the deposit rate at 4.75 per cent and the lending rate at 6.50 per cent. It was Destry Damayanti's first meeting as governor. The Jakarta Post reports that she said the BI rate would remain at 5.75 per cent, where it has stood since June.
Economics & Markets··Evening
The three rates that stayed put
Bank Indonesia on Wednesday held the benchmark 7-day reverse repo rate at 5.75 per cent. The overnight deposit rate stayed at 4.75 per cent and the lending rate at 6.50 per cent. It was Destry Damayanti's first meeting as governor. The Jakarta Post reports that she announced, after the monthly two-day policy meeting, that the BI rate would remain at 5.75 per cent, where it has stood since June, and that analysts had predicted the hold. She said the decision is consistent with stabilising the rupiah and with inflation inside a 2.5 per cent target, plus or minus 1 per cent, in 2026 and 2027.[1], [2]
What the market had priced
29 of 32 economists in a Reuters poll had expected the hold at 5.75 per cent, Nikkei Asia reports. The bank had raised rates by 100 basis points in three moves over May and June. On Wednesday the rupiah strengthened ahead of the decision and ended the day up 0.36 per cent against the dollar. It was the first in-person rate meeting in a year and a half. The Jakarta Post's inflation line, a 2.5 per cent target plus or minus 1 per cent in 2026 and 2027, is the governor's wording on that page. Nikkei Asia separately says August inflation of 3.19 per cent stayed inside a 1.5 per cent to 3.5 per cent target range.[1]
The governor's first in-person meeting
Parliament approved Damayanti as governor in September, and Wednesday's decision was the first in-person rate meeting in a year and a half. The 100 basis points added in May and June are the tightening this hold does not extend. The Jakarta Post quotes her linking the 5.75 per cent rate to the rupiah and to the 2.5 per cent inflation target, plus or minus 1 per cent, for 2026 and 2027. Nikkei Asia's 4.75 per cent deposit rate and 6.50 per cent lending rate did not move with the benchmark. The two pages agree on the headline hold, the governor's name, and the Wednesday timing.[1], [2]
