Jakarta (ANTARA) – Bank Indonesia raised its benchmark interest rate by 25 basis points to 5.50 percent, seeking to support the rupiah, attract foreign capital inflows and contain inflation pressures.Governor Perry Warjiyo announced the move after the central bank's Board of Governors meeting on Tuesday, saying higher yields would help draw foreign portfolio investment.”Bank Indonesia considers further measures necessary to strengthen rupiah stabilization by increasing yields and introducing incentives to encourage foreign investment,” Warjiyo said.The decision followed a sharp decline in the rupiah. The currency opened at Rp18,134 per US dollar on Tuesday after falling 152 points, or 0.84 percent, to Rp18,188 a day earlier.Warjiyo said a review of previous policy decisions showed the rupiah had weakened more than the central bank had expected.Bank Indonesia attributed the decline to persistent global financial-market volatility and strong domestic demand for foreign currency amid continued foreign portfolio outflows.By raising the BI-Rate to 5.50 percent, the central bank aims to increase returns on Indonesian assets and help reverse capital outflows.Bank Indonesia also set its deposit facility rate at 4.50 percent and lending facility rate at 6.25 percent to maintain liquidity balance.Warjiyo said rupiah stability is essential for safeguarding external resilience and anchoring inflation within targets for 2026 and 2027.Under Indonesia's monetary framework, the central bank holds weekly Tuesday meetings to monitor and adjust policy implementation between its regular monthly reviews.