BI Reveals Causes Behind Rupiah Breaching Rp18,000 per US Dollar
The rupiah exchange rate experienced a deepening correction, breaching the level of Rp 18,000 per US dollar on Thursday (4/6/2026). Responding to this, Bank Indonesia (BI) stated that the rupiah’s weakness is still being influenced by global factors, particularly the impact of the conflict between the United States, Israel, and Iran.
“The weakening exchange rate is still influenced by the re-escalation of geopolitical tensions in the Middle East, which hinders peace prospects, thereby keeping oil prices high and increasing the risks of global inflation and capital outflows from emerging markets,” said BI Senior Deputy Governor Destry Damayanti in an official statement on Thursday (4/6/2026).
Furthermore, Destry noted that the domestic demand for US dollars remains high, driven by factors such as dividend repatriation and the payment of external debt.
“Bank Indonesia will continue to be present in the market and increase the intensity of interventions to ensure that market mechanisms function properly and that the stability of the rupiah exchange rate is maintained in accordance with its fundamentals. Additionally, we will strengthen the interest rate structure of pro-market monetary instruments to ensure they remain attractive for capital inflows into domestic asset instruments,” she said.
Continuous intervention will be carried out through Non-Deliverable Forward (NDF) transactions in the offshore market, spot transactions, and Domestic Non-Deliverable Forward (DNDF) in the domestic market, as well as the purchase of Government Securities (SBN) in the secondary market. Intensive coordination and communication with corporations and other market participants are also being maintained.
“In addition, Bank Indonesia is also encouraging the use of local currencies in bilateral cooperation through the Local Currency Transaction (LCT) scheme as an effort to reduce dependence on the US dollar and mitigate exchange rate volatility risks,” she continued.
Such cooperation has been established with China, Japan, Malaysia, Thailand, South Korea, and the United Arab Emirates (UAE). According to Destry, the diversification of trade transactions through the LCT scheme continues to increase. As of April 2026, the value reached approximately US$22.7 billion, compared to approximately US$25.7 billion throughout the previous year.
“In general, the weakening of the rupiah is still in line with regional currencies. Year-to-date (YTD), the rupiah has weakened by 7.44 per cent. Foreign exchange reserves remained stable at the level of US$146.2 billion at the end of April 2026,” she said.