Bank indonesia holds but the hiking cycle may not be over
中文标题
印尼央行按兵不动，但加息周期可能尚未结束
Core conclusion · Tlines extraction
Bank Indonesia kept its policy rate at 5.75% and introduced swap and NDF measures to support the rupiah, signalling currency stability remains its priority. Foreign inflows have been positive for four months but remain modest, while a wider current account deficit, subdued FDI and lower FX reserves keep depreciation pressure alive. Upside inflation risks from fuel prices and a severe El Niño mean ING still expects one more 25bp hike before year-end.
- Institution
- ING THINK
- Published
- 09/23/2026
- Research topic
- Inflation
- Time horizon
- Not explicitly stated
Key arguments
- BI held rates at 5.75% and chose targeted market measures over rate hikes to attract inflows and support the rupiah.
- Foreign bond inflows have been positive for four months, helped by policy certainty after the new finance minister and an unchanged 2026 budget framework.
- External vulnerability persists: FDI is subdued, the current account deficit is set to widen and lower FX reserves reduce intervention capacity.
- ING expects one more 25bp hike before year-end, driven by currency stability needs and inflation risks from fuel prices and El Niño.
Key numbers
- BI policy rate
- 5.75%
- 2026 fiscal deficit projection
- 2.85% of GDP
- 2025 fiscal deficit
- 2.92% of GDP
- Consecutive months of foreign bond net purchases
- 4
- Expected additional rate hike by year-end
- 25bp
Main risks
- A wider current account deficit and subdued FDI could intensify rupiah depreciation pressure.
- Declining FX reserves and weaker reserve adequacy reduce BI's scope for sustained currency intervention.
- Higher fuel prices and a severe El Niño could push domestic inflation above expectations.
Corresponding source evidence
Rupiah and inflation risks keep tightening on the table While investor sentiment has improved, Indonesia's external accounts remain a key source of vulnerability.
At the same time, upside risks to inflation from higher fuel prices and a severe El Niño could add to domestic price pressures.
We therefore continue to expect one additional 25bp rate hike before year-end.
Context: the conclusion is Tlines' automated extraction, not the institution's wording. Quoted evidence is publisher wording. Scope and date must travel with the conclusion.
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AI analysis
Cross-institution comparison · CPI
How this page was produced
Tlines extracted the conclusion, arguments, numbers and risks above from the report published by ING THINK on 09/23/2026, then structured them for comparison. The publisher's own wording is reachable through the source link on this page and is displayed in full above. Last updated 10/17/2026. Methodology · Source policy · AI usage · Request a correction