BI Details Factors Behind Rupiah Exchange Rate Strengthening

Bank Indonesia (BI) Senior Deputy Governor Destry Damayanti stated that the rupiah exchange rate on Friday, 12 June 2026, closed at Rp 17,865 per US dollar, strengthening by 0.84 percent compared to the closing level of Rp 18,010 on 5 June 2026. She said this development reflects a positive market response to BI’s policy mix, which includes raising the BI-Rate to 5.50 percent, strengthening the SRBI interest rate structure, providing hedging swap incentives for foreign investors, and opening repo access to support banking liquidity, as well as increasing the intensity of monetary operations in both rupiah and foreign exchange. These measures are also supported by close synergy between BI and the Government. Following the BI Rate increase, foreign capital inflows have shown positive developments, supported by the attractiveness of domestic financial instruments. High global investor interest is reflected in increased inflows into non-resident SRBI transactions and government securities (SBN), which on 10 and 11 June 2026 were recorded at Rp 15.11 trillion and Rp 3.91 trillion, respectively. Capital inflows also occurred in Danantara’s international bonds, with the initial sale successfully reaching Rp 26.9 trillion, demonstrating investor confidence in domestic assets. External resilience is further strengthened through financial cooperation between Bank Indonesia, the People’s Bank of China (PBOC), and the Hong Kong Monetary Authority (HKMA), resulting in three agreements: synergy to strengthen each country’s financial resilience and broader regional financial stability, reinforcement of the Bilateral Currency Swap Agreement (BCSA), and a strengthened commitment to using local currencies in bilateral transactions through the expansion of Local Currency Transaction (LCT). This step is expected to reduce dependence on the US dollar and support rupiah exchange rate stability. Destry affirmed that Bank Indonesia will continue to be present in the market, consistently and measurably optimise all policy instruments, and strengthen coordination with the Government and various stakeholders to maintain rupiah exchange rate stability and reinforce the external resilience of the Indonesian economy.