Bank Indonesia to Safeguard Rupiah 24 Hours in Overseas Markets Amid Escalating War

Bank Indonesia (BI) has assured that it will safeguard the rupiah’s exchange rate stability throughout the 2026 Lebaran holidays, particularly in trading conducted overseas. As a note, Indonesia’s financial markets will be closed for the extended Lebaran and Nyepi holidays from Wednesday (18 March 2026) to next Tuesday (24 March 2026). Nevertheless, the rupiah continues to be traded overseas in the Non-Deliverable Forward (NDF) market. “As a precautionary measure against rising global market turbulence due to the Middle East conflict, Bank Indonesia assures it will maintain rupiah stability throughout the 2026 Lebaran holidays,” stated BI Senior Deputy Governor Destry Damayanti, as quoted from BI’s statement today, Thursday (19 March 2026). “Although the domestic financial market is closed during the Lebaran holidays, rupiah trading in overseas markets continues, and its fluctuations can impact Indonesia’s economy,” she added. Destry also assured that Bank Indonesia will continue to optimise various monetary policy instruments to strengthen external resilience against potential escalation of the Middle East war, including undertaking necessary adjustment measures to remain consistent in safeguarding national economic stability. The rupiah exchange rate closed at Rp16,975/US$1 in the last trading session before the extended holiday, on Tuesday (17 March 2026). The rupiah strengthened by 0.05% on Tuesday’s trading after having plummeted 0.78% over the previous four trading days. In contrast to the closing position, the rupiah exchange rate has already reached Rp17,000/US1intheNDFmarket.ReferringtoRefinitivdata, inThursdaymorning′stradingat07 : 58WIB, therupiahintheNDFmarkethasreachedthelevelofRp17, 000/US for tenors of one month and above. As a note, NDF is a foreign exchange derivative contract similar to a forward. The difference is that in NDF, there is no delivery of the principal currency at maturity. What is paid is only the difference between the exchange rate agreed at the start of the contract and the reference rate at maturity. Because it is based on the difference, NDF is widely used for hedging, especially when market participants want to lock in exchange rate movement risks without having to buy dollars in the spot market. Almost all Asian currencies faced heavy pressure in Wednesday’s trading (18 March 2026) amid the heating up of the Middle East situation. The Singapore dollar fell 0.62%, the Indian rupee weakened 0.8%, and the Korean won dropped 1.36%. The situation in the Middle East heated up after Iran’s Supreme National Security Council member Ali Larijani was killed in an Israeli attack. Most recently, Intelligence Chief Esmail Khatib has also been reported killed. In addition to the heating up in the Middle East, Asian currencies are expected to face pressure today following the US Federal Reserve (The Fed) once again maintaining interest rates at 3.50-3.75%. The Fed is also projected to cut rates once this year. This decision immediately propelled the US dollar higher. The dollar index closed at 100.14.