Medan— Bank Indonesia (BI) kept its policy rate, the BI-Rate, at 5.75 percent at the Board of Governors Meeting held on 20–21 October 2026. At the same meeting, the Lending Facility rate remained at 6.50 percent, while the Deposit Facility rate was raised to 5.00 percent.
Bank Indonesia stated that the decision forms part of its efforts to maintain rupiah exchange-rate stability amid external pressures while supporting economic growth. The policy is also intended to help keep inflation within the 2026 and 2027 target of 2.5 percent, with a ±1 percentage-point range.
The policy rate is an important instrument in the transmission of monetary policy. Changes in interest rates can affect banks’ funding costs, lending and deposit rates, consumption decisions, and business investment plans. However, the effects on the real economy operate through several channels and are not necessarily immediate or uniform.
For businesses, monetary policy developments are relevant to financing plans, cash-flow management, and investment assessments. For households, understanding interest rates can support decisions about saving, borrowing, and managing financial obligations.
BI’s decision provides relevant learning material for students of economics, management, and accounting to understand the relationships between price stability, exchange rates, the financial system, and economic activity.
This topic is aligned with SDG 8 (Decent Work and Economic Growth) through its focus on macroeconomic stability and support for business activity, and SDG 9 (Industry, Innovation and Infrastructure) through the role of the financial system in supporting investment and productive activities.
Bank Indonesia, siaran pers RDG 20–21 Oktober 2026:
https://www.bi.go.id/id/publikasi/ruang-media/news-release/Pages/sp_2823326.aspx