Despite the recent 50-basis-point hike in the benchmark BI-Rate, Bank Indonesia Governor Perry Warjiyo has urged commercial banks to refrain from increasing their credit interest rates. During the May Board of Governors Meeting, Bank Indonesia made the strategic decision to raise its key policy rate to 5.25 percent, up from the previous 4.75 percent.
Governor Warjiyo underscored the critical need for banks to enhance their operational efficiency. He asserted that improved efficiency is essential to sustain robust credit growth across the banking sector. “Therefore, we request banks to also improve their efficiency so they do not raise credit interest rates,” he stated during an online press conference held on Wednesday, May 20, 2026.
Providing further context, official data shows that banking credit experienced a significant year-on-year growth of 9.98 percent in April 2026. This figure marks an increase from the 9.49 percent growth recorded in March 2026, indicating a positive trend in lending activity. Meanwhile, the average banking credit interest rate stood at 8.73 percent in April 2026, with the one-month deposit rate at 4.16 percent.
To ensure adequate liquidity in both the money and banking markets, Governor Perry detailed a series of proactive measures undertaken by Bank Indonesia. Among these initiatives is the strategic purchase of Government Securities (SBN) in the secondary market. As of May 19, 2026, Bank Indonesia had acquired SBN totaling Rp 140.57 trillion, with Rp 73.28 trillion specifically from secondary market transactions, underscoring its commitment to market stability.
The BI Governor emphasized that while the current monetary policy framework is geared towards fostering stability, the institution remains steadfast in its commitment to promoting overall economic growth. “With the various policies we are implementing, we are confident that the rupiah will remain stable and tend to strengthen,” Perry affirmed, projecting a positive outlook for the national currency.
Furthermore, Perry highlighted that these central bank policies are expected to yield several key economic benefits. They are anticipated to successfully keep inflation within a target range of 1.5 percent to 3.5 percent, drive economic growth to a robust level between 4.9 percent and 5.7 percent, and stimulate credit growth to an optimal range of 8-12 percent.
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Summary
Bank Indonesia Governor Perry Warjiyo urged commercial banks to refrain from increasing credit interest rates, despite BI raising its benchmark BI-Rate by 50 basis points to 5.25% in May 2026. He stressed that banks should improve operational efficiency to sustain robust credit growth, which saw a 9.98% year-on-year increase in April 2026.
To ensure adequate market liquidity, Bank Indonesia actively purchased Government Securities, acquiring Rp 73.28 trillion from the secondary market as of May 19. Governor Warjiyo emphasized that BI’s policies aim to foster stability and promote overall economic growth, targeting inflation between 1.5-3.5%, economic growth of 4.9-5.7%, and credit growth of 8-12% while maintaining rupiah stability.