Bank Indonesia maintained its key interest rate at 5.75% for the third straight meeting at its August 19, 2026 meeting, in line with market expectations, following a surprise 25-bps hike in June to shore up the rupiah and support economic growth. The decision came amid concerns about the central bank's independence from political influence following Perry Warjiyo's sudden resignation as BI chief last month and the appointment of Senior Deputy Governor Destry Damayanti as interim chief. The central bank has raised rates by a total of 100 bps since May, bringing the policy rate to its highest level since April 2025 to attract foreign inflows and shore up the rupiah, which has come under pressure. The annual inflation rate eased to 2.88% in July from 3.34% in June, remaining within Bank Indonesia's 1.5%–3.5% target range. The central bank expects inflation to remain within the government's 2.5% ± 1% target range and has maintained its economic growth forecast of 4.9%–5.7% for 2026.