Bank DBS Projects BI Rate to Rise to 6 Percent by 2026

Bank DBS Indonesia anticipates a significant increase in Indonesia's benchmark interest rate, projecting the BI Rate to reach 6.0% by the close of 2026. The financial institution's analysis indicates that Bank Indonesia will likely raise the rate to 5.75% in the second quarter of 2026, followed by a further increase to 6.0% in the third and fourth quarters.

Djoko Soelistyo, Head of Investment & Insurance Product at Bank DBS Indonesia, explained that the government's current strategy focuses on maintaining the stability of the rupiah's exchange rate amid the dollar's strengthening trend. This approach aligns with the anticipated policy direction of the U.S. central bank, which is also expected to raise interest rates.

However, Soelistyo acknowledged the potential downsides of elevated interest rates. He noted that excessively high rates could dampen public purchasing power and affect retail banking operations. "The impact is that loan interest rates will automatically rise, which also carries risks for banks in general," he stated during a media briefing in Jakarta on June 18, 2026. Consequently, DBS Indonesia hopes Bank Indonesia will periodically review the benchmark rate to mitigate negative economic impacts.

Consumer Banking Director at DBS Indonesia, Melfrida Gultom, assured that the bank adheres to prudent principles in its lending practices, especially with the anticipated rise in the BI Rate. She confirmed that DBS Indonesia regularly reviews its portfolio and conducts stress tests. The bank will tighten its risk appetite criteria and adjust them based on targeted customer segments to manage Non-Performing Loan (NPL) levels effectively.