Bank Indonesia Maintains Balanced Monetary Policy Approach for 2026

Dual Focus on Stability and Growth

Bank Indonesia Governor Perry Warjiyo announced that the central bank will maintain its balanced monetary policy approach in 2026, focusing on both stability and economic growth. Speaking at the Bank Indonesia Annual Meeting (PTBI) 2025, Warjiyo emphasized that despite global uncertainties, the bank will continue to prioritize a pro-stability and growth stance. This balanced approach aims to navigate the challenges posed by the global economic environment while supporting domestic economic expansion.

Differentiated Policy Approaches

While monetary policy will maintain its dual focus on stability and growth, Warjiyo revealed that four other policy areas will be directed towards pro-growth objectives. These include: 1) Macroprudential policy, 2) Payment system digitalization, 3) Financial market deepening, and 4) MSME and Islamic finance development. This differentiated approach indicates BI's commitment to supporting economic growth through multiple policy levers while maintaining monetary stability.

Economic Growth Projections

The central bank projects that Indonesia's economic growth will be between 4.9% to 5.7% in 2026 and slightly higher at 5.1% to 5.9% in 2027. These projections reflect BI's optimistic outlook on the country's economic prospects while acknowledging potential global headwinds. The growth forecast is supported by the bank's comprehensive policy measures aimed at stimulating economic activity.

Policy Measures

Warjiyo outlined several key policy measures that will be implemented in 2026. For monetary policy, the bank will continue to monitor inflation closely and consider further interest rate reductions if warranted to support growth. Additionally, BI will maintain exchange rate stability through interventions in both the NDF market abroad and the spot market domestically, as well as through SBN purchases in the secondary market. The central bank also plans to expand liquidity through pro-market measures to enhance the effectiveness of monetary policy transmission and deepen the financial markets. Furthermore, BI will maintain adequate foreign exchange reserves and expand the use of the DHE SDA foreign exchange placement instrument.