Bank Indonesia Reveals 7 Manoeuvres to Defend Rupiah and Attract Foreign Funds

Bank Indonesia Governor Perry Warjiyo stated that the central bank has thus far undertaken seven measures to maintain exchange rate stability, economic resilience, and national security. Global turmoil has significantly affected the rupiah’s movement; during the first week of June, the currency came under severe pressure, plunging to its worst level in the range of Rp 18,100–Rp 18,200 against the US dollar. Firstly, Perry explained that BI has conducted large-scale interventions in the Non-Deliverable Forward (NDF), Domestic Non-Deliverable Forward (DNDF), and spot markets. ‘The second is how we raised the interest rate (BI Rate),’ he stated during a working meeting with Commission XI of the House of Representatives on Wednesday (10/6/2026). BI raised its benchmark rate twice, by a total of 50 basis points, to 5.50% in May–June 2026. Perry noted that the rate hikes were intended to attract capital inflows and maintain exchange rate stability. Thirdly, BI is promoting the issuance of Bank Indonesia Rupiah Securities (SRBI) to draw back foreign portfolio investment that fled due to global upheavals, simultaneously strengthening rupiah stability. This effort has borne fruit, with SRBI recording a net inflow of Rp 106.8 trillion as of 8 June 2026. According to BI records, SRBI auctions occur twice a week, alongside a 10% incentive reduction in swap hedging rates for foreign investors to boost attractiveness and offset investor obligations. ‘Number four, we are working with the fiscal authorities to safeguard sufficient liquidity buffers in the money market and banking sector, particularly by reactivating the repo auction window for tenors of 3, 6, and 12 months,’ he elaborated. Consequently, banks needing liquidity can be serviced by BI at any time. Perry stated that this ensures BI’s confidence that primary money growth will remain in double digits, above 10%. Fifth, BI has relaxed restrictions on speculative dollar purchases. Under the new rule, BI sets a limit for dollar purchases at US$ 25,000 per person per month, subject to an underlying transaction. Sixth, BI is promoting the use of Local Currency Transactions. Perry noted that trade and economic transactions using the yuan are growing significantly, exceeding US$ 25 billion annually last year. Finally, BI is tightening supervision of banks and corporations conducting large-scale dollar purchase transactions.