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Bank Indonesia holds rate at 5.75%, cuts reserve requirement as credit growth eases

Published Data as of IndonesiaMacro & householdsVehicle finance
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Key points

Implications for lenders

With consumer credit growing 4.86% against 13.26% for all bank credit, consumer and vehicle lenders may face slower demand rather than tighter funding, as the reserve requirement falls to 7%. The 0% minimum down payment through 2027 leaves down-payment policy to each lender's own underwriting, so loss assumptions for low or zero down-payment loans can be reviewed against recent collections.

Implications

ExecutivesLower reserve requirements from November and December may ease bank funding costs at a time when deposit growth has slowed, while the policy rate stays unchanged.
InvestorsCredit growth remains led by investment lending; consumer credit growth, at a fraction of the total, gives little sign yet of a broad household borrowing upturn.
OperatorsVehicle and property lenders can plan 2027 products on the extended down-payment and loan-to-value rules, but their own risk appetite, not BI's floor, will set actual down payments.

Facts

Policy rates: after its Board of Governors meeting on 20–21 October 2026, BI held the BI-Rate at 5.75% (unchanged from September). 1 The deposit facility rate was set at 5.00%, raised from 4.75% after the September meeting, 2 and the lending facility rate stayed at 6.50%. 3 BI said the policy mix aims to keep the rupiah stable and support growth; the rupiah stood at IDR 17,985 per USD on 20 October, weaker by 0.61% than at end-September. 4

Reserve requirements: the rupiah reserve requirement (GWM) for conventional banks will fall from 9% 5 to 8% on 1 November 6 and 7% on 1 December. 7 For Islamic banks and Islamic business units it will fall from 7.5% 8 to 5.5%, down from 7.5%; 6.5% from 1 November. 9 At the same time, the ceiling of the macroprudential liquidity incentive (KLM), which lowers the reserve requirement for banks that lend to priority sectors, falls from 6% 10 to 5% of deposits from 1 December. 11 BI also said part of banks' rupiah reserves will be remunerated from 1 December.

Consumer-credit rules: BI extended the 0% minimum down payment for new motor vehicle loans 12 and the 100% maximum loan-to-value ratio for property loans at banks that meet its criteria 13 from the end of 2026 to 31 December 2027.

Credit and liquidity: bank credit grew 13.26% year on year in September, down from 13.65% in August. 14 Investment credit grew 23.20% (down from 25.11% in August), 15 working-capital credit 11.89% (up from 11.45% in August) 16 and consumer credit 4.86% (down from 5.07% in August). 17 Bank deposits grew 8.22%, down from 10.94% in August. 18 The ratio of liquid assets to deposits was 24.08%, up from 23.04% in August. 19 Undisbursed loans totalled IDR 2,562.57 trn, 20 or 21.70% of available credit ceilings. 21 BI kept its projection for 2026 credit growth at 8–12%. 22

Analysis

Time series: on BI's announced figures, bank credit growth climbed from March to 13.65% in August 23 before easing to 13.26% in September (see chart), still above the top of BI's 8–12% projection for the year. The growth is concentrated in investment credit at 23.20%, while consumer credit grew 4.86%. Deposits are growing more slowly than loans (8.22% against 13.26%), and the reserve-requirement cut releases funds that banks would otherwise hold at BI, which can ease funding for lenders as deposit growth slows. The large stock of undisbursed loans, 21.70% of ceilings, suggests that borrower demand rather than bank liquidity may limit how much of that is lent.

Region: BI is holding while inflation, at 3.28% in September, 24 sits below the 3.5% upper bound of its target. 25 In the Philippines, where inflation reached 7.2% in September, 26 the central bank's policy rate was 5.0% after an August increase 27 and Nomura expected a further increase to 5.25% at the October meeting. 28 Indonesia is easing bank liquidity through reserve rules rather than the policy rate, while the Philippine central bank has been raising its rate.

Bank credit growth (y/y) (%)
0510159.492026-039.982026-0411.512026-0512.672026-0613.582026-0713.652026-0813.262026-09
Bank credit growth (y/y) (%)
2026-039.49
2026-049.98
2026-0511.51
2026-0612.67
2026-0713.58
2026-0813.65
2026-0913.26

Bank credit, y/y at month-end, as announced by Bank Indonesia after its Board of Governors meeting · Source: Bank Indonesia Board of Governors meeting results, as reported by ANTARA and others (2026-03, 2026-04, 2026-05, 2026-06, 2026-07, 2026-08, 2026-09) OJK's announced figures for April, June and July 2026 are identical.

Counterpoints and uncertainties

The reserve-requirement cut may not translate into more lending if borrowers keep facilities undrawn, as the high undisbursed share suggests. BI raised the deposit facility rate while cutting reserve requirements, so the net effect on money-market rates is uncertain, and further rupiah weakness could push BI towards tighter settings. The September credit figures are BI's board-meeting numbers and can differ from OJK's banking statistics and BI's money-survey series.

Key figures

  1. BI-Rate (October 2026 decision): 5.75% (unchanged from September). Bank Indonesia benchmark policy rate. Indonesia, national. Basis date: 21 Oct 2026. Source: Bank Indonesia press release No. 28/233/DKom: BI-Rate Tetap 5,75%: Memperkuat Stabilitas, Mendorong Pertumbuhan Ekonomi (2026-10-21)
  2. BI deposit facility rate (October 2026): 5.00% (raised from 4.75% after the September meeting). Overnight deposit facility rate. Indonesia, national. Basis date: 21 Oct 2026. Source: Bank Indonesia press release No. 28/233/DKom: BI-Rate Tetap 5,75%: Memperkuat Stabilitas, Mendorong Pertumbuhan Ekonomi (2026-10-21)
  3. BI lending facility rate (October 2026): 6.50% (unchanged). Overnight lending facility rate. Indonesia, national. Basis date: 21 Oct 2026. Source: Bank Indonesia press release No. 28/233/DKom: BI-Rate Tetap 5,75%: Memperkuat Stabilitas, Mendorong Pertumbuhan Ekonomi (2026-10-21)
  4. Rupiah per US dollar, 20 October 2026: IDR 17,985 per USD (weaker by 0.61% than at end-September). Rupiah exchange rate against the US dollar on 20 October 2026, as stated by Bank Indonesia. Indonesia, national. Basis date: 20 Oct 2026. Source: Bank Indonesia press release No. 28/233/DKom: BI-Rate Tetap 5,75%: Memperkuat Stabilitas, Mendorong Pertumbuhan Ekonomi (2026-10-21)
  5. Rupiah reserve requirement, conventional banks (before cut): 9%. Rupiah statutory reserve requirement (GWM) for conventional commercial banks, share of deposits, before the October 2026 decision. Indonesia, national. Basis date: 21 Oct 2026. Source: Bank Indonesia press release No. 28/233/DKom: BI-Rate Tetap 5,75%: Memperkuat Stabilitas, Mendorong Pertumbuhan Ekonomi (2026-10-21)
  6. Rupiah reserve requirement, conventional banks, from 1 November 2026: 8% (down from 9%). Rupiah statutory reserve requirement (GWM) for conventional commercial banks from 1 November 2026. Indonesia, national. Basis date: 1 Nov 2026. Source: Bank Indonesia press release No. 28/233/DKom: BI-Rate Tetap 5,75%: Memperkuat Stabilitas, Mendorong Pertumbuhan Ekonomi (2026-10-21)
  7. Rupiah reserve requirement, conventional banks, from 1 December 2026: 7% (down from 9% before the October decision). Rupiah statutory reserve requirement (GWM) for conventional commercial banks from 1 December 2026. Indonesia, national. Basis date: 1 Dec 2026. Source: Bank Indonesia press release No. 28/233/DKom: BI-Rate Tetap 5,75%: Memperkuat Stabilitas, Mendorong Pertumbuhan Ekonomi (2026-10-21)
  8. Rupiah reserve requirement, Islamic banks and units (before cut): 7.5%. Rupiah statutory reserve requirement for Islamic commercial banks and Islamic business units, before the October 2026 decision. Indonesia, national. Basis date: 21 Oct 2026. Source: Bank Indonesia press release No. 28/233/DKom: BI-Rate Tetap 5,75%: Memperkuat Stabilitas, Mendorong Pertumbuhan Ekonomi (2026-10-21)
  9. Rupiah reserve requirement, Islamic banks and units, from 1 December 2026: 5.5% (down from 7.5%; 6.5% from 1 November). Rupiah statutory reserve requirement for Islamic commercial banks and Islamic business units from 1 December 2026. Indonesia, national. Basis date: 1 Dec 2026. Source: Bank Indonesia press release No. 28/233/DKom: BI-Rate Tetap 5,75%: Memperkuat Stabilitas, Mendorong Pertumbuhan Ekonomi (2026-10-21)
  10. Macroprudential liquidity incentive (KLM) ceiling, before change: 6%. Maximum KLM incentive (reduction in reserve requirement) for banks, share of third-party funds, before 1 December 2026. Indonesia, national. Basis date: 21 Oct 2026. Source: Bank Indonesia press release No. 28/233/DKom: BI-Rate Tetap 5,75%: Memperkuat Stabilitas, Mendorong Pertumbuhan Ekonomi (2026-10-21)
  11. Macroprudential liquidity incentive (KLM) ceiling from 1 December 2026: 5% (down from 6%). Maximum KLM incentive for banks, share of third-party funds, from 1 December 2026 (financing channel up to 3%, money-market deepening up to 2%). Indonesia, national. Basis date: 1 Dec 2026. Source: Bank Indonesia press release No. 28/233/DKom: BI-Rate Tetap 5,75%: Memperkuat Stabilitas, Mendorong Pertumbuhan Ekonomi (2026-10-21)
  12. Minimum down payment, new motor vehicle loans (extended to end-2027): 0% (extended from end-2026 to 31 December 2027). Bank Indonesia minimum down payment for new motor vehicle credit/financing, 1 January–31 December 2027. Indonesia, national. Basis date: 31 Dec 2027. Source: Bank Indonesia press release No. 28/233/DKom: BI-Rate Tetap 5,75%: Memperkuat Stabilitas, Mendorong Pertumbuhan Ekonomi (2026-10-21)
  13. Maximum loan-to-value ratio, property loans (extended to end-2027): 100% (extended from end-2026 to 31 December 2027). Bank Indonesia maximum loan-to-value / financing-to-value ratio for property credit, for banks meeting BI criteria, 1 January–31 December 2027. Indonesia, national. Basis date: 31 Dec 2027. Source: Bank Indonesia press release No. 28/233/DKom: BI-Rate Tetap 5,75%: Memperkuat Stabilitas, Mendorong Pertumbuhan Ekonomi (2026-10-21)
  14. Bank credit growth, September 2026 (BI): 13.26% (down from 13.65% in August). Bank credit, y/y at month-end, as announced by Bank Indonesia after its Board of Governors meeting. Indonesia, national. Basis date: 30 Sep 2026. Source: Bank Indonesia press release No. 28/233/DKom: BI-Rate Tetap 5,75%: Memperkuat Stabilitas, Mendorong Pertumbuhan Ekonomi (2026-10-21)
  15. Investment credit growth, September 2026 (BI): 23.20% (down from 25.11% in August). Bank investment credit, y/y, as announced by Bank Indonesia after its Board of Governors meeting. Indonesia, national. Basis date: 30 Sep 2026. Source: Bank Indonesia press release No. 28/233/DKom: BI-Rate Tetap 5,75%: Memperkuat Stabilitas, Mendorong Pertumbuhan Ekonomi (2026-10-21)
  16. Working-capital credit growth, September 2026 (BI): 11.89% (up from 11.45% in August). Bank working-capital credit, y/y, as announced by Bank Indonesia after its Board of Governors meeting. Indonesia, national. Basis date: 30 Sep 2026. Source: Bank Indonesia press release No. 28/233/DKom: BI-Rate Tetap 5,75%: Memperkuat Stabilitas, Mendorong Pertumbuhan Ekonomi (2026-10-21)
  17. Consumer credit growth, September 2026 (BI): 4.86% (down from 5.07% in August). Bank consumption credit, y/y, as announced by Bank Indonesia after its Board of Governors meeting. Indonesia, national. Basis date: 30 Sep 2026. Source: Bank Indonesia press release No. 28/233/DKom: BI-Rate Tetap 5,75%: Memperkuat Stabilitas, Mendorong Pertumbuhan Ekonomi (2026-10-21)
  18. Bank deposit (third-party funds) growth, September 2026 (BI): 8.22% (down from 10.94% in August). Bank third-party funds (DPK), y/y, as announced by Bank Indonesia after its Board of Governors meeting. Indonesia, national. Basis date: 30 Sep 2026. Source: Bank Indonesia press release No. 28/233/DKom: BI-Rate Tetap 5,75%: Memperkuat Stabilitas, Mendorong Pertumbuhan Ekonomi (2026-10-21)
  19. Liquid assets to deposits (AL/DPK), September 2026: 24.08% (up from 23.04% in August). Banks' liquid assets / third-party funds, as stated by Bank Indonesia. Indonesia, national. Basis date: 30 Sep 2026. Source: Bank Indonesia press release No. 28/233/DKom: BI-Rate Tetap 5,75%: Memperkuat Stabilitas, Mendorong Pertumbuhan Ekonomi (2026-10-21)
  20. Undisbursed bank loans, September 2026 (BI): IDR 2,562.57 trn. Approved bank credit facilities not yet drawn, as stated by Bank Indonesia. Indonesia, national. Basis date: 30 Sep 2026. Source: Bank Indonesia press release No. 28/233/DKom: BI-Rate Tetap 5,75%: Memperkuat Stabilitas, Mendorong Pertumbuhan Ekonomi (2026-10-21)
  21. Undisbursed loans as share of credit ceilings, September 2026 (BI): 21.70%. Undisbursed loans / total available credit ceilings, as stated by Bank Indonesia. Indonesia, national. Basis date: 30 Sep 2026. Source: Bank Indonesia press release No. 28/233/DKom: BI-Rate Tetap 5,75%: Memperkuat Stabilitas, Mendorong Pertumbuhan Ekonomi (2026-10-21)
  22. BI projection for 2026 bank credit growth: 8–12%. Bank Indonesia projection range for bank credit growth in 2026. Indonesia, national. Basis date: 21 Oct 2026. Source: Bank Indonesia press release No. 28/233/DKom: BI-Rate Tetap 5,75%: Memperkuat Stabilitas, Mendorong Pertumbuhan Ekonomi (2026-10-21)
  23. Bank credit growth, August 2026 (BI): 13.65% (up from 13.58% in July). Bank credit, y/y at month-end, as announced by Bank Indonesia after its Board of Governors meeting. Indonesia, national. Basis date: 31 Aug 2026. Source: Kontan: Kredit perbankan Agustus 2026 tumbuh 13,65%, investasi jadi penopang utama (2026-09-24), citing Bank Indonesia's September board meeting
  24. Headline CPI inflation (BPS): 3.28% (up from 3.19% in August). Year-on-year change in the consumer price index. Indonesia, national. Basis date: 30 Sep 2026. Source: ANTARA: Inflasi tahunan RI capai 3,28 persen pada September 2026 (2026-10-01, BPS data)
  25. Upper bound of BI inflation target: 3.5%. Upper bound of the target band. Indonesia, national. Basis date: 23 Sep 2026. Source: ANTARA: BI-Rate kembali bertahan di level 5,75 persen pada RDG September
  26. Headline CPI inflation (PSA): 7.2% (up from 6.1% in August; matches April 2026). Year-on-year change in the consumer price index. Philippines, national. Basis date: 30 Sep 2026. Source: Inquirer: PH inflation climbs to 7.2% in September (2026-10-06)
  27. BSP policy rate (as reported): 5.0% (unchanged since the 28 August 2026 increase from 4.75%). BSP overnight reverse repurchase rate as cited in press coverage. Philippines, national. Basis date: 9 Sep 2026. Source: Inquirer: Bad loans up amid continuing consumer strain (2026-09-09)
  28. Nomura expected BSP policy rate after October meeting: 5.25% (25 bp increase from 5.0%). Policy rate Nomura expects the BSP to set at its October 2026 meeting. Philippines. Basis date: 12 Oct 2026. Source: Philstar: Inflation pressures most widespread in Philippines — Nomura (2026-10-12)

Sources

  1. Bank Indonesia press release No. 28/233/DKom: BI-Rate Tetap 5,75%: Memperkuat Stabilitas, Mendorong Pertumbuhan Ekonomi (2026-10-21)primary
  2. Kontan: Kredit perbankan Agustus 2026 tumbuh 13,65%, investasi jadi penopang utama (2026-09-24), citing Bank Indonesia
  3. ANTARA: BI-Rate kembali bertahan di level 5,75 persen pada RDG September
  4. ANTARA: Inflasi tahunan RI capai 3,28 persen pada September 2026 (2026-10-01, BPS data)
  5. Inquirer: PH inflation climbs to 7.2% in September (2026-10-06)
  6. Philstar: Inflation pressures most widespread in Philippines — Nomura (2026-10-12)
  7. Inquirer: Bad loans up amid continuing consumer strain (2026-09-09)
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