Bank Indonesia's Rate Has Swung 225 Basis Points Since 2025. Your Bank Loan Barely Moved, Either Way
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7 min read
Bank Indonesia cut its policy rate five times in 2025, one and a quarter percentage points in total. Then in 2026 it reversed course and raised that same rate by a full percentage point. If your bank loan rate tracked the BI Rate one for one, it would have gotten noticeably cheaper through most of 2025, then noticeably more expensive again this year. It almost certainly did neither. Here is how much of Bank Indonesia's own rate movement actually reached your loan, in each direction, with the real numbers behind it.
The BI Rate is Bank Indonesia's benchmark interest rate, the price it charges other banks for short-term money and the anchor every other interest rate in the economy is priced against. A basis point, often shortened to "bps," is one hundredth of a percent, so 25 basis points is 0.25%.
Through 2025, Bank Indonesia cut the BI Rate five separate times, all in steps of 25 basis points, taking it from 6.00% down to 4.75%:
| Decision date | Move | BI Rate after |
|---|---|---|
| 15 Jan 2025 | −25 bps | 5.75% |
| 21 May 2025 | −25 bps | 5.50% |
| 16 Jul 2025 | −25 bps | 5.25% |
| 20 Aug 2025 | −25 bps | 5.00% |
| 17 Sep 2025 | −25 bps | 4.75% |
Source: Bank Indonesia's own policy announcements for each date, cross-checked against NetWort's own prior look at these same cuts, which verified the same table against Databoks and IDN Financials reporting.
BI then held the rate at 4.75% for seven straight months, through the end of 2025 and into early 2026, before reversing direction as the rupiah came under heavy pressure. In May 2026 it raised the rate 50 basis points to 5.25%. Then, as the rupiah kept weakening, it moved twice more just nine days apart: an off-cycle emergency hike on 9 June 2026 of 25 basis points to 5.50%, followed by a scheduled hike on 18 June 2026 of another 25 basis points to 5.75%. That is a full 100 basis points of hikes in 2026 alone. BI has held the rate at 5.75% at every meeting since, including its most recent decision on 22 to 23 September 2026.
This is the number that matters if you have a mortgage, a car loan or a business loan: the weighted average rupiah bank lending rate that Indonesia's banks actually charge, tracked by the Financial Services Authority (OJK) and Bank Indonesia's own banking statistics.
| Period | Average lending rate | What BI Rate was doing |
|---|---|---|
| Early 2025 | 9.20% | About to start cutting |
| Jan 2026 | 8.80% | Held at 4.75% |
| Mar 2026 | 8.76% | Held at 4.75% |
| Apr 2026 | 8.70% | Held at 4.75%, about to start rising |
| Jul 2026 | 8.86% | Had just risen to 5.75% |
| Aug 2026 | 8.9% (stable) | Held at 5.75% |
Source: OJK and Bank Indonesia banking statistics as reported by Bloomberg Technoz and Kontan through 2026.
Run the two directions separately and the gap is stark. Over the roughly 15 months from early 2025 to April 2026, while BI cut its policy rate 125 basis points, the average lending rate fell only about 50 basis points, from 9.20% to 8.70%. That is less than half of BI's own cut, spread across more than a year.
Then the hikes: from April to August 2026, BI raised its rate 100 basis points, and the average lending rate rose only around 20 basis points, from 8.70% to about 8.9%. Proportionally that is an even smaller share of the policy move than the cuts managed, though the hikes have had far less time to work through the system, only about four months against the cuts' fifteen. It is too early to say for certain whether hikes will ultimately reach borrowers faster than cuts did. What is already clear, in both directions, is that the BI Rate you read about in the news is not the rate your bank actually charges you, and the gap between them is large.
Bank Indonesia's own governor, Perry Warjiyo, has pointed to one specific drag on the cutting side: banks kept paying high deposit rates to large depositors even as the policy rate fell, which kept banks' own funding costs elevated and slowed how much room they had to cut what they charged borrowers. On the way up, OJK has said banks are moving gradually because they are weighing both their own funding costs and how much of a rate increase their existing borrowers can actually absorb without defaulting.
There is a simpler mechanical reason too. A bank's loan book is mostly loans it already made at yesterday's rate. Only new loans, and the small share of existing loans with a floating rate that resets on a schedule, reprice quickly. The average lending rate is a blend of old and new, so it moves slowly by construction, no matter how fast the BI Rate itself moves.
That margin, the difference between what a bank pays for deposits and what it earns on loans, is called net interest margin, and it is a real, watchable number for any bank stock. NetWort's asset page for Bank Central Asia, Indonesia's largest bank by market value, is one place to see how a specific lender's own numbers respond as this cycle plays out.
Do not assume a BI Rate cut in the news will show up in your mortgage or business loan payment within the same month, and do not assume a hike will either. Based on the last 20 months, expect a large share of any BI Rate move to simply not reach your bank's advertised rate at all, and expect what does reach it to take months rather than weeks. If you are shopping for a loan or deciding whether to wait for a cut, the number to check is your specific bank's current advertised rate, not the BI Rate headline.
NetWort's Macro Context page tracks the BI Rate itself alongside inflation and the rupiah, so you can see where policy stands right now rather than relying on whatever headline you last read. For the mechanics of how the BI Rate is actually structured, including the separate Deposit Facility and Lending Facility rates mentioned in the table above, NetWort's explainer on BI's rate corridor covers that in full.