Indonesia: BI Hikes Rates to Support Rupiah.

Bank Indonesia raised its key interest rate by 25 bps to 5.75% at its June 18, 2026, meeting, as widely expected, following a 25 bps hike at an off-schedule meeting on June 9 aimed at supporting the rupiah, taming inflation, and supporting economic growth. 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. The annual inflation rate surged to 3.08% in May from 2.42% in April, nearing the upper end of BI's 1.5%-3.5% target range. The rupiah strengthened to Rp17,730 per US dollar on June 17, 2026, up 0.76% from end-May levels, while the central bank kept inflation within the government's 2.5% ±1% target range. However, the central bank maintained its economic growth forecast of 4.9%–5.7% for 2026. Bank Indonesia also raised the rates on its overnight deposit facility and lending facility by 25 bps each, to 4.75% and 6.50%, respectively.