Bank Indonesia Holds Benchmark Rate at 5.75% for a Fourth Straight Meeting: Reserve Requirements Cut as Overnight Deposit Rate Rises to 5%
Bank Indonesia announced in Jakarta on October 21 that it was keeping its benchmark seven-day reverse repurchase rate unchanged at 5.75%, the fourth straight policy meeting without a move. Of 29 economists polled by Reuters, 15 had expected the hold, while the rest had expected a hike of at least 25 basis points to stem the market selloff.
The central bank lowered banks' reserve requirements, to 7% from 9% for conventional banks and to 5.5% from 7.5% for Islamic banks. It raised the overnight deposit facility rate by 25 basis points to 5.00% and kept the lending facility rate unchanged at 6.50%.
The decision came amid market turmoil. Bank Indonesia raised rates by a total of 100 basis points between May and June, bringing the policy rate to its highest level since April 2025 to defend the rupiah. In recent days, a warning from index provider MSCI that it could relegate Indonesian equities to standalone market status triggered a record-breaking two-day stock market rout, with the rupiah hovering near an all-time low.
Annual inflation accelerated to a three-month high of 3.28% in September, while core inflation eased to 2.84%. The central bank expects inflation to remain within its target range of 2.5% plus or minus one percentage point, and it maintained its 2026 GDP growth forecast of 4.9% to 5.7%. (Compiled from Reuters, October 21)
Source: GSM · USA (original Chinese edition)
Photo: 位于雅加达的印度尼西亚银行总部大楼实景。图片来源：Wikimedia Commons 文件 Gedung Bank Indonesia di Jakarta (2026) 01.jpg，Medelam 摄，CC BY-SA 4.0 授权
