Indonesia’s central bank keeps main rate unchanged but hikes deposit facility rate, to cut RRR

Published Wed, Oct 21, 2026 · 03:23 PM — Updated Wed, Oct 21, 2026 · 03:41 PM

[JAKARTA] Indonesia’s central bank kept its main policy rate unchanged on Wednesday (Oct 21) but hiked its deposit facility rate and said it would cut its reserve requirement ratio, days after an equities market rout and as the rupiah currency hovered near an all-time low.

Bank Indonesia kept the benchmark 7-day reverse repurchase rate at 5.75 per cent, as expected by 15 of 29 economists in a Reuters poll. The rest had expected a hike of at least 25 basis points.

The central bank hiked its overnight deposit by 25 bps to 5 per cent and kept the lending facility rates unchanged at 6.5 per cent.

BI will cut its reserve requirement ratio for commercial banks in stages in November and December and offered new incentives for some hedging transactions to attract foreign inflow and support the rupiah, Governor Destry Damayanti said.

In recent days, the rupiah has come under pressure again after MSCI’s warning last week that it could move Indonesian equities to “standalone” market status triggered a heavy market selloff.

Indonesia’s bourse had a record-breaking two-day rout in trading on Friday and Monday and a fall that was steeper than any during the 1998 Asian financial crisis.

Analysts surveyed by Reuters from Oct 13-19 were nearly evenly split about whether Bank Indonesia would hold or hike rates.

Fifteen were expecting it to keep the benchmark at 5.75 per cent while 13 predicted a 25 basis points hike and one saw a 50 bps increase.

The rupiah was trading 0.06 per cent weaker following Wednesday’s policy announcement. It remained this year’s worst-performing emerging Asian currency, having lost more than 7 per cent against the US dollar.

The central bank raised rates by 100 bps in three moves between May and June to defend the rupiah, which hit an all-time low in June, weighed down by cooling investor sentiment over South-east Asia’s biggest economy, but it has since kept rates unchanged.

Analysts and investors have been concerned by fiscal sustainability amid President Prabowo Subianto’s spending plans and expensive fuel subsidies straining the national budget, as well as worries over central bank independence. REUTERS