March 17, 2026 | 04:10 pm
TEMPO.CO, Jakarta - Bank Indonesia (BI) decided to maintain the benchmark interest rate (BI Rate) at 4.75 percent. The decision was made during the Board of Governors meeting held on March 16-17, 2026.
"Considering the prospect assessments and various global and domestic challenges, particularly the impact of the Middle East War, the Bank Indonesia Board of Governors Meeting on March 16-17, 2026, decided to maintain the BI Rate at 4.75 percent," said Perry in a press conference on Tuesday, March 17, 2026.
The central bank also decided to maintain the deposit facility interest rate at 3.75 percent and the lending facility interest rate at 5.50 percent.
Perry explained that the decision was made to strengthen the stability of the rupiah amid worsening global conditions due to the war between Iran and Israel, and to maintain the inflation target for 2026-2027 within the range of 2.5 plus or minus 1 percent. Perry stated that the BI will continue to optimize various monetary policy instruments to strengthen the country's resilience in the face of potential escalation of conflicts in the Middle East.
Perry mentioned that the Iran-Israel war has led to deteriorating global conditions, resulting in a depreciation of the exchange rate and an outflow of capital from emerging market countries, including Indonesia. "The exchange rate of the rupiah on March 16, 2026, was recorded at Rp16,985 per U.S. dollar, a 1.29 percent depreciation point to point compared to the end of February 2026, following the weakening of non-USD currencies," said Perry.
The Institute for Economic and Social Research of the Faculty of Economics and Business, University of Indonesia (LPEM FEB UI), previously suggested that BI should maintain the benchmark interest rate at 4.75 percent. LPEM UI researcher Jahen Fachrul Rezki stated that the risk of import inflation has increased due to the rise in global energy prices caused by the U.S.-Iran war.
LPEM also indicated that foreign investors recorded a net outflow of US$0.75 billion. "In this condition, Bank Indonesia has limited room to cut interest rates, and we believe that Bank Indonesia should maintain the BI Rate at 4.75 percent to maintain rupiah stability and control inflation," Jahen said in the Macroeconomic Analysis Series report, as quoted on Tuesday, March 17, 2026.
Read: JCI Opens Higher Ahead of BI Rate Announcement
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