Jakarta (ANTARA) – Bank Indonesia (BI) is confident that a 50 basis point (bps) increase in the benchmark interest rate (BI-Rate) to 5.25 percent will not burden MSME borrowers, as long as banking liquidity is maintained with the support of macroprudential policies.”If, for example, the interest rate increases, but liquidity is maintained, I do not think the increase will further burden (MSMEs),” BI Senior Deputy Governor Destry Damayanti said on Monday.According to her, support for MSMEs continues, especially with government programs providing various incentives and stimulus for MSMEs and low-income segments.She explained that the central bank has a macroprudential policy that provides incentives through a reduction in the minimum reserve requirement (GWM) to banks that channel credit to certain sectors, including MSMEs.Through the Macroprudential Liquidity Incentive (KLM) Policy, banks have received Rp424.7 trillion (US$23.3 billion) in incentives through the first week of May 2026.This incentive was also strengthened following the BI Rate hike, partly through the spread between the BI Rate and lending rates to mitigate interest rate fluctuations.Damayanti said adequate banking liquidity is also reflected in the ratio of liquid assets to third-party funds (AL/TPF), which was recorded at 25.39 percent as of April 2026. Meanwhile, TPF grew by 11.39 percent year-on-year (yoy).She explained that Bank Indonesia's decision to raise the BI-Rate is driven by the global “higher-for-longer” trend, marked by rising U.S. bond yields, persistent inflation, and a stronger U.S. dollar index (DXY) against most global currencies.In these conditions, exchange rate stability is crucial. Without policy adjustments, pressure on the rupiah will intensify, particularly from portfolio capital flows, she continued.Furthermore, BI has implemented seven policies, including foreign exchange intervention through Non-Deliverable Forward (NDF) transactions in the overseas market, as well as spot and Domestic Non-Deliverable Forward (DNDF) transactions in the domestic market.BI also purchased Government Securities (SBN) to maintain liquidity and prevent yields from rising too sharply.In addition, BI has strengthened the requirement to include underlying in foreign exchange purchase transactions, which is expected to suppress speculative dollar demand and be based solely on real needs.At the BI Board of Governors' Meeting (RDG) in May 2026, the BI Rate was decided to increase by 50 basis points from 4.75 percent to 5.25 percent.This increase marks the first adjustment after the benchmark interest rate was maintained at 4.75 percent since September 2025.Throughout 2025, BI had previously cut the benchmark interest rate five times, totaling 125 bps.BI records showed that bank credit grew by 9.98 percent (yoy) in April 2026, higher than the 9.49 percent (yoy) growth in March 2026. Credit growth in 2026 is estimated to be in the range of 8-12 percent.In April 2026, the credit interest rate was recorded at 8.73 percent, while the 1-month deposit interest rate stood at 4.16 percent.