APAC Economic Comment: BI and BSP: Follow-up hikes, calibrated signal

Research evidence excerpt

APAC Economic Comment: BI and BSP: Follow-up hikes, calibrated signal

Global Research

18 June 2026ab

APAC Economic Comment Economics

Asia EmergingBI and BSP: Follow-up hikes, calibrated signal

Grace Lim

Economist

Bank Indonesia (BI) raised its policy rate by 25bp to 5.75% on 18 June, following an off- grace-k.lim@ubs.com

+65-6495 5965

cycle 25bp hike on 9 June and a 50bp hike last month, bringing cumulative tightening to

100bp this year. Likewise, the Bangko Sentral ng Pilipinas (BSP) raised the policy rate Claire Long

25bp to 4.75%, bringing cumulative tightening this year to 50bp. Both decisions were Economist

in line with UBS and consensus expectations, although a meaningful minority expected claire.long@ubs.com

+65 6495 7426

BI to hold today given its front-loaded tightening. Based on central bank engagement

post-decision (more balanced than outright hawkish), we expect the bulk of the Rohit Arora

tightening in this cycle is already done, assuming oil prices and upside risks to inflation Strategist

fall back with a US-Iran deal. We forecast one more hike this year for BSP (August) and BI rohit-b.arora@ubs.com

+65-6495 5232

(September).

Teck Quan Koh

BI: Anchoring FX stability remains the near-term priority Strategist

teck-quan.koh@ubs.com

Bank Indonesia (BI) delivered a consistent message on its near-term policy focus, largely +65-6495 4416

unchanged from the pro-stability stance conveyed at the off cycle meeting. The follow-

up hike itself, partially unpriced by markets given that a sizable minority had expected a

hold—suggests the move was intended to reinforce credibility and “seal the deal” on

stability priorities (see note). The strong engagement—with Governor Warjiyo fielding

questions from over 100 investors and market participants—also reflects a deliberate