Antara News·Indonesia·Monday, September 28, 2026 at 09:39 AM

Fed rate hike expected in Q4 as energy prices surge: BI

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Bayu Saputra, Yashinta Difa

Jakarta (ANTARA) - The Federal Reserve is expected to execute one final interest rate hike in the fourth quarter of 2026 amid persistent global inflationary pressures, according to Bank Indonesia (BI) Governor Destry Damayanti.

Destry stated that the anticipated tightening follows the US central bank's decision on Sept 16 to raise its benchmark rate by 25 basis points to a range of 3.75 to 4.00 percent.

"As we know, the Fed recently raised its interest rates by 25 basis points, and we still anticipate one more hike in the fourth quarter," Destry said during a hearing with Commission XI of the House of Representatives (DPR RI) at the Parliament Complex, Jakarta, on Monday.

She further explained that the high-interest-rate environment in the US continues to bolster the US dollar against global currencies, triggering capital outflows from emerging markets toward developed economies.

The US Dollar Index (DXY) was recorded at 101.11, while the dollar index against Asian currencies stood at 96.26.

Destry attributed the Fed's aggressive monetary tightening to persistent global inflation, which has reached 4.6 percent.

Surging energy commodity prices, exacerbated by ongoing international conflicts - particularly in the Middle East - remain a primary driver of price pressures.

Oil prices hit US$125.53 per barrel as of September 24, climbing sharply from the August 2026 average of US$90.88 per barrel.

While describing the global economic outlook for 2026 as "gloomy," the BI Governor expressed optimism for a turnaround by 2027.

In the meantime, Indonesia's central bank remains committed to a policy framework focused on maintaining external stability.

"Monetary policy will lean towards stability, while other measures will be directed at driving economic growth," Destry stated.

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