March 17, 2026 | 08:36 pm
TEMPO.CO, Jakarta - Deputy Governor of Bank Indonesia (BI) Aida S. Budiman stated that they will continue to monitor inflation risks resulting from the war between Iran and Israel. However, she said that the current inflation rate remains under control.
"We will continue to monitor the development of the escalation of the Middle East war, and this will certainly have an impact on inflation, especially from the supply chain and commodity price increases," said Aida during a press conference on Tuesday, March 17, 2026. Meanwhile, domestically, she stated that volatile food prices also need attention.
Aida explained that the Meteorology, Climatology, and Geophysics Agency (BMKG) has warned of the possibility of a drier and earlier dry season. Aida said that this condition could affect the prices of horticultural commodities such as chili, corn, and rice.
The annual inflation rate was recorded at 4.76 percent in February 2026. Aida stated that the high inflation was caused by a 50 percent discount on electricity tariffs in January and February 2025.
According to Aida, the relatively high level of inflation will persist until March. "But overall, our inflation projection still ranges within the target of 2.5 plus or minus 1 percent," she said.
Bank Indonesia has decided to maintain its benchmark interest rate at 4.75 percent. The central bank also maintains the deposit facility interest rate at 3.75 percent and the lending facility interest rate at 5.50 percent.
"Taking into account the assessment of prospects and various global and domestic challenges, especially the impact of the Middle East war, the Board of Governors of Bank Indonesia on 16-17 March 2026 decided to maintain the BI-Rate at 4.75 percent," said BI Governor Perry Warjiyo.
He stated that the decision was made to strengthen the stability of the rupiah exchange rate amid the Iran-Israel war and to maintain the achievement of the 2026-2027 inflation target within the range of 2.5 plus or minus 1 percent.
Read: Indonesia Must Maintain Growth Momentum Amid Iran War, Says BI Governor
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