BI prepares measures to stabilise rupiah amid MSCI fallout
BI Prepares Measures to Stabilize Rupiah Amid MSCI Fallout
24 Okt 2026 03:42 WIB
Voice of Indonesia
Poin Utama
Bank Indonesia prepares measures to stabilize the rupiah after MSCI’s market reclassification proposal.
Higher hedging incentives aim to attract foreign capital and curb exchange-rate volatility.
RRI.CO.ID, Jakarta - Bank Indonesia (BI) is preparing measures to stabilize the rupiah amid financial market pressures after Morgan Stanley Capital International (MSCI) proposed reclassifying Indonesia’s capital market.
The central bank said exchange-rate volatility remains manageable despite foreign capital outflows from equities and fixed-income instruments.
Head of BI’s Monetary and Securities Asset Management Department, Erwin Gunawan Hutapea, said market participants have gradually begun digesting the impact of MSCI’s announcement.
“It briefly weakened to above IDR 18,000 per US dollar, but not by much. We can still manage it well. Hopefully, the shock is gradually being digested by market participants,” Erwin said in Jakarta on Friday, Oct. 23, 2026, as quoted by Antara.
MSCI announced the proposed reclassification on Oct. 15. A day later, the Jakarta Composite Index (JCI) fell 11.57 percent, while the Jakarta Interbank Spot Dollar Rate (JISDOR) weakened to IDR 18,052 per US dollar.
Erwin confirmed that foreign capital outflows occurred in the stock market, government bonds, and Bank Indonesia Rupiah Securities (SRBI), although he did not disclose the value of the outflows.
To respond to market conditions, BI said rupiah liquidity remains sufficient to support activity in the domestic financial market. The central bank also stands ready to intervene if capital outflows spill over into the foreign-exchange market and trigger exchange-rate volatility beyond acceptable levels.
During its October Board of Governors Meeting, BI maintained the benchmark BI-Rate at 5.75 percent and the lending facility rate at 6.5 percent. However, the deposit facility rate was raised by 25 basis points to 5 percent.
BI also strengthened incentives for Domestic Non-Deliverable Forward (DNDF) hedging instruments to attract foreign capital inflows and support rupiah stability. Under the revised policy, hedging premium reductions were increased to 40 percent for six-month tenors from 25 percent previously, and to 45 percent for 12-month tenors from 30 percent.
The incentives apply to foreign funding transactions, including portfolio investment inflows, overseas borrowing by banks, and foreign direct investment.
Earlier, BI Governor Destry Damayanti said the central bank continues to monitor the risk of foreign capital outflows following MSCI’s announcement. According to Destry, BI’s assessment shows that pressure on the rupiah remains relatively normal, despite broader challenges facing regional financial markets.
“We have been holding intensive discussions over the past two days on how to respond to this situation,” she said. ***
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