Bank Indonesia (BI) maintained its key interest rate at 5.75% for the third consecutive meeting at its September 23 meeting, as expected, as the rupiah strengthened recently, boosted by capital inflows after volatility in the first half of the year. The decision highlighted the central bank's concerns about rupiah stability under newly appointed Governor Destry Damayanti. BI has raised rates by a total of 100 bps in May and June combined, bringing the policy rate to its highest level since April 2025 to attract foreign inflows and shore up the rupiah. The annual inflation rate accelerated to 3.19% in August but remained within BI's 1.5%–3.5% target range. BI expects inflation to remain within the government's 2.5% ± 1% target range in 2026 and 2027. BI also kept the rates on its overnight deposit facility and lending facility unchanged at 4.75% and 6.5%, respectively.