Indonesia Interest Rate

Central Bank stands pat in April

Bank holds rates for seventh meeting in a row: At its meeting on 21–22 April, Bank Indonesia (BI) decided to hold the BI-Rate at 4.75% for the seventh consecutive meeting, matching market expectations.

Monetary policy drivers: The decision reflects Bank Indonesia’s aim to support the rupiah amid deteriorating global conditions and heightened uncertainty linked to the war in the Middle East and to maintain inflation within its 1.5%–3.5% target range. The conflict prompted BI to revise 2026 global GDP growth lower and raise its global inflation forecast, citing energy price shocks that are disrupting supply chains and fueling inflation. Moreover, the Bank stated that the Fed is likely to keep rates elevated through year-end, narrowing the scope for near-term domestic rate cuts.

BI to remain cautious ahead: Bank Indonesia stated that it is prepared to tighten monetary conditions, if needed, to provide support to the domestic currency and maintain inflation within target. A majority of panelists now expect interest rates to end of 2026 at or above current levels amid heightened geopolitical uncertainty and tighter global financing conditions, while a minority sees room for cuts. BI is scheduled to reconvene on 19–20 May.

Panelist insight: Commenting on the outlook, United Overseas Bank’s Enrico Tanuwidjaja and Vincentius Ming Shen stated: “Looking ahead, BI is expected to maintain a hawkish hold through 2026, with limited room for rate cuts given persistent global uncertainties. Currency stability will continue to rely on SRBI optimization, FX interventions, and regulatory tightening, while growth support will be anchored by credit incentives and payment system modernization. Inflation, particularly food inflation, will be managed through close coordination with the government under the Movement for Inflation and Food Prosperity (GPIPS) program.”

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Indonesian interest rate projections for the next ten years from a panel of 28 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Indonesian interest rate.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Indonesian interest rate projections.

Want to get access to the full dataset of Indonesian interest rate forecasts? Send an email to info@focus-economics.com.