Bank Indonesia lifts BI-Rate 25 bps to 5.50% after rupiah slide

25 bps is the policy move: Bank Indonesia raised the BI-Rate to 5.50% on June 9, while lifting the Deposit Facility rate to 4.50% and the Lending Facility rate to 6.25%. The measure came through the Board of Governors’ weekly meeting after the rupiah weakened more than the central bank expected.

The Bank Indonesia statement redistributed by The Asian Banker ties the hike to rupiah stabilisation, foreign portfolio outflows and global volatility linked to the Middle East war. The central bank also pointed to strong domestic foreign-exchange demand as an added pressure on the currency.

The market trigger was visible in the exchange rate. ANTARA reported that the rupiah opened at Rp18,134 per U.S. dollar on Tuesday after falling 152 points, or 0.84%, to Rp18,188 a day earlier. That made the rate decision a currency-defence action rather than a routine monthly adjustment.

Bank Indonesia paired the rate increase with liquidity and flow measures: higher SRBI yields across 6-, 9- and 12-month tenors, a 10% reduction in hedging swap costs for foreign investors, repo windows for 3-, 6-, 9- and 12-month tenors, and intensified spot, DNDF and offshore NDF intervention.

For investors, the near-term question is whether higher rupiah yields can slow portfolio outflows without tightening domestic liquidity too sharply. The next data points are daily rupiah levels, SRBI auction demand, and Bank Indonesia’s next monthly Board of Governors meeting.

Not investment advice. Verify all figures with primary sources before acting.