Wall Street rallied overnight, breaking a three-day losing streak as semiconductor stocks led a broad rebound and Q2 earnings beat expectations across the board. But the risk-on tone came with strings attached — Brent crude pushed past $91/barrel on continued US-Iran escalation, and the dollar index sits near a one-week high. That's the exact combination — expensive oil, strong dollar — that shaped Bank Indonesia's biggest call of the week.

BI kept the BI-Rate at 5.75% (consensus: 6%), with Deposit and Lending Facility also held at 4.75% and 6.50%, framed as defending rupiah stability while keeping a pro-growth stance through other levers rather than rates alone. The bet only pays off if oil and the dollar cooperate — otherwise the rupiah absorbs the pressure, and reserves absorb the cost of intervention.

Loan growth came in at 12.67% YoY (vs. 11.51% in May), with investment loans leading at 24.90% YoY, while third-party funds grew 10.21% YoY — BI kept its 2026 loan growth projection at 8–12%. On the plumbing side, repo underlying was expanded, with SMI/SMF bonds now qualifying for OM repo and PASBI by end-September, pushing banks to repo out SRBI/SBN rather than hoard it. BI also signaled SRBI rates have likely peaked, partly to keep drawing foreign inflow. The new KLM policy adds teeth: banks get up to a 2% DPK reserve-requirement cut, but only if they stay under a 19% SRBI+SBN ratio — cross that line and the incentive drops to zero, effective September 1, aimed at easing liquidity segmentation between big and small banks.

This mix signals BI is actively repairing system liquidity rather than just holding steady. We expect SRBI yields to stay flat rather than rise further — tight liquidity looks to have peaked, with banks now being pushed back toward core intermediation instead of parking cash in SRBI.