Bank Indonesia's Interest Rate Expected to Remain, Rupiah and Inflation Remain Concerns
Bank Indonesia is expected to maintain its benchmark interest rate at 4.75% throughout 2026, as the rising risk of inflation due to the Iran war has renewed pressure on global energy prices. In a Reuters poll published on April 20, 2026, the majority of economists believe BI will continue to maintain a cautious stance, as surging oil prices could complicate efforts to maintain inflation and the rupiah exchange rate.
This cautious stance aligns with BI's previous decision. In an official release on February 19, 2026, Bank Indonesia confirmed that the BI-Rate would remain at 4.75%, with a primary focus on stabilizing the rupiah amid high global uncertainty while continuing to support economic growth. This means that even before the latest Reuters poll was released, BI's policy direction had already indicated a preference for holding interest rates rather than loosening them too quickly.
The primary reason is now increasingly clear: the Iran war increases the risk of imported inflation, particularly through energy and logistics channels. Reuters also reports that other central banks in Asia are beginning to adjust their vigilance regarding the impact of the Middle East conflict, while the IMF has cut its 2026 global growth projection and raised its global inflation projection due to energy disruptions resulting from the war. For Indonesia, these conditions significantly narrow the scope for interest rate cuts.
In conclusion, the current market message is quite clear: Bank Indonesia (BI) will likely prioritize stability over easing. As long as energy prices remain vulnerable to increases, the rupiah remains sensitive, and global inflation remains subdued, BI is expected to hold the BI Rate at 4.75% for longer. This conclusion is supported by the latest Reuters poll, previous official BI decisions, and the worsening global inflation risks stemming from the Middle East conflict. (Zaf)
Source: Newsmaker.id
