{
    "success": true,
    "data": {
        "id": 1800994,
        "msgid": "how-bank-indonesias-rate-hike-brings-foreign-capital-back-1781286609",
        "date": "2026-06-12 11:47:15",
        "title": "How Bank Indonesia's Rate Hike Brings Foreign Capital Back",
        "author": " ",
        "source": "GALERT",
        "tags": "",
        "topic": "Finance",
        "summary": "Bank Indonesia reports that its recent interest rate increase to 5.50% has successfully attracted foreign capital back into rupiah-denominated instruments like SRBI and short-term government bonds, helping the rupiah strengthen below Rp18,000 per US dollar. The central bank pledges to maintain the attractiveness of domestic assets to sustain these inflows, while an economist cautions that the rate hike may only provide temporary relief if rupiah weakness is driven by external factors such as broad US dollar strength or geopolitical tensions.",
        "content": "<p>How Bank Indonesia\u2019s Rate Hike Brings Foreign Capital Back<\/p>\n<p>Translator<\/p>\n<p>Anastasya Lavenia Yudi<\/p>\n<p>Editor<\/p>\n<p>Dewi Elvia Muthiariny<\/p>\n<p>Jumat, 12 Juni 2026 11:44 WIB<\/p>\n<p>TEMPO.CO, Jakarta - Bank Indonesia (BI) stated that foreign investors\nhave responded positively to the benchmark interest rate hike to 5.50\npercent and the strengthening yields of rupiah investment instruments.\nHead of the BI Communication Department, Ramdan Denny Prakoso, noted a\nvisible uptick in foreign capital flowing into Bank Indonesia Rupiah\nSecurities (SRBI) and State Bonds (SBN).<\/p>\n<p>\u201cThis is reflected in the surge of foreign capital inflows into SRBI\ninstruments following the SRBI auction on June 10, 2026,\u201d Denny said in\na written statement on Friday, June 12, 2026.<\/p>\n<p>He also pointed out that foreign portfolio investment has begun\nflowing back into the SBN market, particularly targeting short- and\nmedium-term tenors.<\/p>\n<p>In line with these market dynamics, Denny observed that the rupiah\nexchange rate against the US dollar continues to rally, clawing its way\nback below Rp18,000 per US dollar. He emphasized that BI will stay\nvigilant in monitoring global and domestic financial market developments\nwhile maintaining the allure of domestic financial assets to sustain\nforeign capital inflows.<\/p>\n<p>The rupiah exchange rate experienced brief rallies on Tuesday, June\n9, and Wednesday, June 10, 2026. On Wednesday, June 10, 2026, the local\ncurrency closed 114 points stronger at Rp17,944 per US dollar. However,\nthe rupiah slightly buckled the following day, weakening back to the\nlevel of Rp17,988 per US dollar on Thursday, June 11, 2026.<\/p>\n<p>Dean of the Faculty of Economics and Business at Airlangga\nUniversity, Rahma Gafmi, suggested that Bank Indonesia\u2019s decision to\nraise interest rates outside of the regular Monthly Board of Governors\nMeeting could serve as an effective shock therapy to stabilize the\nvolatile forex market.<\/p>\n<p>\u201cHowever, if the recent weakening of the rupiah was primarily\ntriggered by fundamental external factors, such as broad US dollar\nstrength or escalating geopolitical tensions, this 25-basis-point hike\nrisks being merely a temporary stop at the expense of domestic economic\ngrowth,\u201d Rahma told Tempo.<\/p>\n<p>Mutia Yuantisya contributed to this article<\/p>\n<p>Read: Rupiah Strengthens to Rp17,944: What Factors Drive the\nRecovery?<\/p>\n<p>Click here to get the latest news updates from Tempo on Google\nNews<\/p>",
        "url": "https:\/\/jawawa.id\/newsitem\/how-bank-indonesias-rate-hike-brings-foreign-capital-back-1781286609",
        "image": ""
    },
    "sponsor": "Okusi Associates",
    "sponsor_url": "https:\/\/okusiassociates.com"
}