JAKARTA, 21 May 2026 – Bank Indonesia may need to raise interest rates again after its surprise half-point hike, as investors remain unconvinced that one aggressive move will be enough to stabilise the rupiah and restore confidence in Indonesian assets.
The central bank raised its benchmark seven-day reverse repurchase rate by 50 basis points to 5.25%, marking its first rate increase in two years. It also lifted the overnight deposit facility rate to 4.25% and the lending facility rate to 6.00%, in a stronger-than-expected move aimed at defending the rupiah and preventing inflation risks from becoming entrenched.
Unlock the Full Article
This article is exclusive to The Ledger Asia Subsribers / PAID members.
Already have an account? Log in here
