Bank Indonesia Lifts Rates 50 Bps to 5.25% as Rupiah Hits 17,745 per Dollar

2 articles · Updated · Reuters · May 20

Bank Indonesia delivered its first rate increase in two years, doubling market expectations with a 50-basis-point move and also lifting its deposit and lending facility rates to 4.25% and 6.00%.
The central bank said the hike was aimed at stabilizing the rupiah after it slid to a record 17,745 per dollar, with the currency still down about 6% this year amid Middle East war-driven volatility and domestic policy concerns.
Governor Perry Warjiyo said BI would pair higher rates with market intervention and efforts to attract capital inflows; foreign-exchange reserves have already fallen by $10 billion this year through April.
BI kept its inflation and growth outlooks unchanged, citing April inflation of 2.42% within its 1.5%-3.5% target and forecasting 2026 growth at 4.9%-5.7%, while promising ample banking liquidity to cushion the economy.

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