BI: Global and Domestic Factors Influencing Rupiah Pressure Today

Bank Indonesia (BI) states that the pressure on the rupiah exchange rate, which has reached Rp17,500 per US dollar on Tuesday, is influenced by a combination of global and domestic factors. Senior Deputy Governor of BI, Destry Damayanti, in a written statement in Jakarta on Tuesday, explained that global factors include the increased intensity of conflict in the Middle East, which is driving up oil prices and global uncertainty. Meanwhile, domestically, the central bank has noted a seasonal increase in US dollar demand, such as for foreign debt payments, dividends, and Hajj pilgrimage needs, which are boosting foreign exchange demand in the domestic market. “BI will continue to commit to always being present in the market by carrying out smart interventions, both in the spot market, DNDF, and NDF, and also optimising the use of all monetary operation instruments so that it is hoped this can reduce pressure on the rupiah,” said Destry. She added that BI also sees foreign investor confidence in domestic portfolio assets continuing to improve. This is reflected in capital inflows into the State Securities (SBN) and Bank Indonesia Rupiah Securities (SRBI) markets, reaching Rp61.6 trillion in April 2026. In addition, foreign exchange liquidity in the domestic market remains adequate, as reflected in the 10.9 per cent year-to-date growth in third-party funds (DPK) in foreign currency as of the end of March 2026. “BI predicts that this seasonal pressure will subside, allowing the rupiah exchange rate to return to its fundamental level,” Destry concluded. As a note, during the Financial System Stability Committee (KSSK) press conference on Thursday (7/5), BI Governor Perry Warjiyo assured that foreign exchange needs can still be met despite increased demand due to seasonal factors in the April to May 2026 period. Amid the ongoing exchange rate weakening, Perry emphasised that the central bank remains fully committed to maintaining rupiah stability by continuing to coordinate with the government. Based on the latest data, foreign exchange reserves stood at $146.2 billion in April 2026, down $2 billion from the previous month, amid government foreign debt payments and rupiah stabilisation policies. This decline occurred despite additional foreign exchange from tax and service receipts as well as government global bond issuance. Previously, foreign exchange reserves at the end of March 2026 were recorded at $148.2 billion. The rupiah exchange rate closed on Tuesday (12/5) weaker by 115 points or 0.66 per cent at Rp17,529 per US dollar from the previous close at Rp17,414 per US dollar. Bank Indonesia’s Jakarta Interbank Spot Dollar Rate (JISDOR) on Tuesday also weakened to Rp17,514 per US dollar from the previous Rp17,415 per US dollar.