Flooring Guide by Cinvex – In a decisive move during the May 2026 Board of Governors Meeting, Bank Indonesia (BI) announced a 0.5 percent hike in its benchmark interest rate, known as the BI-Rate, bringing it to 5.25 percent. Alongside this, the deposit facility rate was increased by 50 basis points to 4.25 percent, while the lending facility rate was also raised by 50 basis points to reach 6 percent.
Responding to these adjustments, Ramon Armando, Corporate Secretary of PT Bank Tabungan Negara (Persero) Tbk (BTN), stated that the banking industry is well-prepared for evolving monetary policy scenarios. He emphasized that BTN is actively refining its risk management strategies to navigate the current financial climate.
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“The banking sector is fundamentally equipped to manage various monetary policy shifts, including potential hikes in the benchmark interest rate. Each institution maintains robust risk management protocols and conducts periodic stress tests to account for the impact of BI-Rate increases on the cost of funds,” Ramon explained in Jakarta on Wednesday (May 21).
To mitigate sensitivity to exchange rate fluctuations, BTN is focused on maintaining an efficient funding structure. The bank is prioritizing the growth of low-cost funds, specifically through Current Account Savings Accounts (CASA), as a core component of its corporate funding strategy.
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Previously, BI Governor Perry Warjiyo noted that the decision to raise the BI-Rate aligns with the central bank’s 2026 monetary focus on pro-stability measures. This strategy is designed to reinforce Indonesia’s external economic resilience against ongoing global volatility.
While monetary policy centers on stability, BI continues to utilize macroprudential and payment system policies to foster economic growth. By maintaining a loose macroprudential stance, the central bank aims to stimulate the real sector through increased credit financing, all while ensuring the continued stability of the national financial system.
Summary
Bank Indonesia has increased its benchmark interest rate, the BI-Rate, by 50 basis points to 5.25 percent to strengthen national economic stability amidst global volatility. In response, Bank Tabungan Negara (BTN) is refining its risk management strategies and conducting regular stress tests to effectively navigate the impact of these rising costs on its financial operations.
To maintain efficiency and minimize sensitivity to exchange rate fluctuations, BTN is prioritizing the growth of low-cost funds through its Current Account Savings Accounts (CASA). This strategic focus aims to optimize the bank’s funding structure while the central bank continues to utilize macroprudential policies to support growth in the real sector.