Jakarta. Bank Indonesia (BI) raised its benchmark interest rate by 25 basis points to 5.75% on Thursday, stepping up efforts to stabilize the rupiah amid mounting external pressures as the Indonesian currency slid to its weakest level in months.

The decision was announced at the central bank's Board of Governors Meeting held on June 18. Bank Indonesia also increased the Deposit Facility rate by 25 basis points to 4.75% and the Lending Facility rate by 25 basis points to 6.50%.

Bloomberg data showed that, as of 12:05 p.m. Jakarta time, the rupiah weakened by 34 points, or 0.96%, to Rp 17,796 per US dollar in the spot market. Meanwhile, the US Dollar Index rose 0.14% to 10,229.

"The increase is a further step to strengthen rupiah stability amid persistently high global uncertainty and a pre-emptive measure to ensure inflation remains within the government's target range of 2.5%, plus or minus 1%, in 2026 and 2027," Bank Indonesia Governor Perry Warjiyo said during a press conference following the meeting.

Perry said the central bank would continue to maintain an accommodative macroprudential stance to support economic growth, while preserving financial system stability.

"Loose macroprudential policies will be further strengthened to encourage credit and financing growth to the real sector while safeguarding financial system stability," he said.

Meanwhile, Bank Indonesia's payment system policies will remain focused on supporting economic activity through broader digital payment adoption, strengthening the payment system industry structure, and enhancing the reliability and resilience of payment infrastructure.

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