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View all search resultsBI holds rate steady to rein in rupiah's weakening
The central bank has decided to keep the BI-Rate unchanged at 4.75 percent to prevent the rupiah from spiraling ever downward amid the nearly two-month war in Iran as the currency hit a record low of Rp 17,193 per greenback on Wednesday, while experts pointed to a narrowing room for monetary policy in its aim to secure financial stability.
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A clerk holds up Indonesian and United States banknotes on Jan. 21, 2026, at a Bank Syariah Indonesia branch in South Tangerang, Banten. (Antara/Hafidz Mubarak A)
B
ank Indonesia (BI) has decided to leave its benchmark interest rate unchanged to buffer the rupiah’s ongoing depreciation below its fundamental value, which it has deemed is largely driven by the United States-Israel war on Iran.
Following the central bank’s two-day monthly policy meeting, BI Governor Perry Warjiyo announced at a press conference on Wednesday that the benchmark BI-Rate would remain at 4.75 percent, where it has been since September 2025.
Keeping the rupiah from spiraling downward has become BI’s primary focus as of last month.
Perry said the decision to maintain the current rate was taken to “reinforce the stabilization of the rupiah exchange rate against the impact of worsening global economic conditions due to the war in the Middle East”.
Readings from Investing.com show the rupiah’s exchange rate to the US dollar has been weakening steadily from 16,765 before the initial US-Israeli missile salvo on Feb. 28 to as low as 17,193 on April 22.
Over the war’s nearly two months, the rupiah has been inching ever closer to the nadir of 17,300 per US dollar recorded during the 1998 Asian financial crisis.
The “rupiah is too weak” and its value did not reflect the country’s economic fundamentals, Perry said, adding that “going forward, the exchange rate will stabilize and incline to strengthen”.
