BI Cites Reasons for Rupiah Weakening During Idul Adha Holiday

JAKARTA, KOMPAS.com - Bank Indonesia (BI) has revealed the causes of the rupiah’s continued weakness against the US dollar, particularly during the Idul Adha 1447 Hijriah holiday period. Rupiah closed at Rp 17,880.5 per US dollar on Friday (29 May 2026), down 35 points or 0.20% from the previous trading session’s close. BI’s Communication Department Head Ramdan Denny Prakoso stated that the rupiah remains under pressure due to global uncertainties stemming from escalating tensions between the US and Iran. Earlier on Thursday (28 May 2026), US forces launched strikes against Iran, prompting Iranian retaliatory attacks on US military bases later that morning. “The rupiah’s exchange rate continues to be affected by ongoing global uncertainties due to developments in the Middle East conflict,” he told media on Friday (29 May 2026). This coincides with the period for foreign debt repayments and corporate dividend repatriation. “There is a seasonal increase in foreign currency demand amid limited US dollar inflows,” he said. Nevertheless, the central bank remains committed to intervening in the market to maintain rupiah exchange rate stability through optimised foreign exchange interventions. Interventions include offshore Non-Deliverable Forward (NDF) transactions, spot and Domestic Non-Deliverable Forward (DNDF) transactions in the domestic market, and consistent, measured purchases of government securities (SBN) in the secondary market. Additionally, BI is strengthening the rupiah through the benchmark interest rate (BI rate), which supports domestic financial asset attractiveness and foreign capital inflows. “Bank Indonesia continues to strengthen coordination with relevant authorities to support financial market and exchange rate stability, including enhanced monitoring of banks and corporations with high US dollar purchase activity,” he added. Looking ahead, BI will continue to monitor global and domestic financial market developments and consistently implement measured measures to maintain rupiah exchange rate stability and support the economy’s external resilience.