BI, Finance Ministry, and Economists Convene to Discuss Rupiah Conditions: Here Are the Results!

The rupiah exchange rate against the US dollar has entered a new equilibrium point after experiencing pressure that breached the Rp17,000/US$ level since 1 April 2026. Based on Bank Indonesia’s (BI) Jakarta Interbank Spot Dollar Rate (Jisdor) reference rate on 1 April, the rupiah was traded at an average of Rp17,002 between banks. Since then, Jisdor has not recorded the rupiah moving below Rp17,000, and it has continued to rise to Rp17,122/US$ on 13 April 2026. BI Senior Deputy Governor Destry Damayanti explained that the exchange rate movements in recent days are inseparable from the effects of the war in the Middle East between the United States and Israel against Iran, which has strengthened the dollar’s value against various world currencies, including the rupiah. That conflict has triggered risk-off sentiment or avoidance of risk factors among global investors, leading them to divest from portfolio instruments in emerging market countries, including Indonesia, to buy US securities and dollars. As a result, the dollar index against several major world currencies (DXY) has strengthened. “There is risk-off. That means investors are avoiding risk, so there is safe haven activity. Like it or not, flows go to advanced economies, including the US. The DXY has increased,” said Destry at the 2026 Central Banking Forum themed Indonesia’s Economic Resilience in Facing Global Exchange Rate Volatility, in Jakarta, quoted on Tuesday (14/4/2026). At the opening of trading in Indonesia’s financial markets yesterday, the rupiah was immediately pressured to Rp17,100/US$, or depreciated by 0.09% compared to last weekend’s trading, while the DXY was indeed experiencing a strong strengthening to 99.01 based on Revinitif data at 09:00 WIB. The DXY was observed to strengthen by 0.37% at that time. As a result, it is not only the rupiah that is pressured against the US dollar. Several emerging market currencies with economic capacities equivalent to Indonesia have also experienced currency weakening, even worse than Indonesia. Director of Economic Stabilisation Strategy at the Directorate General of Economic and Fiscal Strategy (DJSEF) of the Ministry of Finance, Noor Faisal Achmad, emphasised that this better rupiah volatility is due to Indonesia’s strong macroeconomic fundamentals. This is evident from the manufacturing purchasing managers’ index (PMI) still at an expansion level of 50.1 in March 2026, to credit growth still reaching around 9.37% year-on-year. “So Indonesia’s pressure is still moderate compared to peers. Rupiah depreciation is still controlled,” said Faisal at the CNBC Indonesia 2026 Central Banking Forum. Based on Bank Indonesia’s records, the rupiah volatility index is still the lowest compared to seven other countries, at 4.75. Meanwhile, the other seven countries, such as the Indian rupee at 8.92, Philippine peso at 10.55, Thai baht at 12.40, Mexican peso at 13.20, Brazilian real at 13.69, Argentine peso at 14.50, and South African rand at 16.34. Rupiah depreciation or weakening is still better than many countries, even though its value has settled at Rp17,100 per US dollar. BI noted that depreciation up to the week since the beginning of the year is only 2.91%, while the Korean won reached 2.85% against the US dollar, Indian rupee 3.08%, and Turkish lira 3.69%. “So Indonesia is strong compared to peers, inflation is controlled, fiscal is prudent, we maintain a prudent deficit. Debt ratio below 60% limit,” said Faisal. Head of Monetary Management and Securities Assets Department at BI, Erwin Gunawan, added that the still controlled weakening of the rupiah exchange rate against the US dollar is also due to the maintained fundamentals of the rupiah itself. Rupiah fundamentals such as the current account deficit still around 0.69%. “This is still within our tolerance limit,” said Erwin. Then, inflation pressure still within BI’s target range throughout this year, 2.5% plus minus 1%, namely 3.48% the latest figure released by the Central Statistics Agency (BPS) in March 2026. Third, foreign exchange reserves that are now still around US$148.2 billion. This amount is above the global standard to meet 6 months of imports and government foreign debt payments. “So from those three, the rupiah’s fundamentals are fine, even though we are not immune to global turmoil,” he stressed. Therefore, Erwin is confident that the rupiah trend will actually strengthen in the medium to long term, because the exchange rate pressure so far is still related to external risk factors, namely developments in the Middle East war dynamics between the United States and Israel against Iran. “So in the medium to long term, the rupiah has hope of a strengthening trend. We must be patient in seeing the conflict,” said Erwin. This statement was echoed by BCA Chief Economist David E. Sumual. “I just want to show from the fundamental strength side, the rupiah is quite good. Usually economists calculate it as relative strength compared to other currencies - improving,” he said at the 2026 Central Banking Forum. David also explained that Indonesia does indeed carry out quite large imports that require abundant dollar supplies. However, David reminded that the imports carried out by Indonesia tend to drive exports. Then, Indonesia’s inflation is still controlled. Domestic inflation, according to David, is relatively low. Although it surged in February and March, it is slowly starting to decline. Therefore, he assured that the rupiah deserves to strengthen, but David acknowledged that the current rupiah weakening is more influenced by short-term investors exiting the portfolio asset market. “Rupiah movements are dominantly more driven by portfolio investors,” he explained. Therefore, to address the issue of short-term investor sentiment that has pressured the rupiah, David emphasised that monetary and fiscal authorities must be able to reduce dependence on