Bank Indonesia holds main rate but lifts deposit facility rate
Bank Indonesia kept its 5.75% benchmark rate unchanged but raised the deposit facility rate by 25 bps to 5.00% amid a stock rout and rupiah weakness.
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what happened
Bank Indonesia left its 7-day reverse repurchase rate at 5.75% for a fourth straight policy review. Fifteen of 29 economists polled by Reuters had expected this outcome, while the rest had forecast a hike of at least 25 basis points.
The overnight deposit rate rose 25 bps to 5.00%, and the lending facility rate stayed at 6.50%. Governor Destry Damayanti said the bank will gradually cut the reserve requirement ratio for commercial banks in November and December and introduce new incentives for certain hedging transactions to draw in foreign inflows and support the rupiah.
The move follows a record two-day equities rout after MSCI warned it could reclassify Indonesian stocks as "standalone". The rupiah remains near its all-time low.
why it matters
The decision suggests the central bank is defending the currency without further tightening policy. Investors in Indonesian assets will watch capital outflow risks, MSCI's decision and fiscal sustainability amid President Prabowo Subianto's spending plans.
market impact
Rupiah and Indonesian stocks: currency support and capital inflows versus MSCI-related pressure
tags
instruments
sources
- Indonesia's central bank keeps main rate unchanged, hikes deposit facility rate — Reuters, 21 October 2026 at 06:59 UTC
- Indonesia central bank keeps main rate unchanged but hikes deposit facility rate, to cut RRR — Reuters, 21 October 2026 at 07:26 UTC
prepared by the newsmetry newsroom with ai assistance from the sources listed below. not investment advice.
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