BI Governor Reveals 5 Reasons Why the Dollar Could Return to Rp17,500 in 2027

Bank Indonesia (BI) Governor Perry Warjiyo has revealed five reasons why the central bank is confident the rupiah exchange rate will strengthen below Rp18,000 per US dollar in 2027. This statement aligns with the projected movement of the rupiah throughout 2027, ranging from Rp16,800 to Rp17,500 per US dollar, as outlined in the Macro-Economic Framework and Fiscal Policy Principles (KEM PPKF) document for the 2027 Fiscal Year. Firstly, Perry stated that BI believes the global economy will improve next year, with global turmoil and perceived investment risks easing. ‘This will therefore boost the current portfolio, maintain a healthy balance of payments and a lower current account deficit. Likewise, investment yields in Indonesia will remain attractive and financial markets will continue to develop,’ Perry said during a working meeting with Commission XI of the Indonesian House of Representatives. Secondly, the rupiah’s strengthening will be supported by new government regulations concerning Natural Resources Export Proceeds (DHE SDA) and a single-window policy for commodity exports through PT Danatara Sumberdaya Indonesia (DSI). ‘We believe these policies are significant and will not only affect state revenues, namely financing to achieve high economic growth, but also increase foreign exchange reserves,’ he said. Furthermore, Perry emphasised that BI will strengthen all instruments to maintain stability and bolster the rupiah exchange rate, including efforts to ensure foreign exchange adequacy and execute forward transactions both domestically and abroad. He confirmed that BI will also coordinate with the government to ensure that yields on Government Securities (SBN) remain attractive, ensuring continued foreign capital inflows into the Indonesian market. BI will also expand instruments and transactions in the domestic foreign exchange market and ensure sufficient foreign exchange liquidity in the banking sector and adequate foreign exchange reserves. Finally, Perry confirmed that BI will support higher economic growth through monetary and macroprudential policies. ‘The Finance Minister and I stated to the public on 6 June that we are coordinating closely to strengthen rupiah exchange rate stability by increasing the attractiveness of yields to encourage foreign capital investment flows, as well as maintaining sufficient liquidity in the money market and banking sector,’ he said.