BI: Rise in SRBI rates attracts foreign portfolio inflows and stabilises the rupiah

Bank Indonesia Governor Perry Warjiyo said that the rise in Bank Indonesia Rupiah Securities (SRBI) rates over the past two months has driven foreign portfolio inflows and supported stabilisation of the rupiah. According to BI data, SRBI rates rose to 6.21%, 6.31% and 6.45% for tenors of six, nine and twelve months respectively as of 13 May 2026. ‘That (the SRBI rate hike) has succeeded in pushing portfolio inflows after Q1 saw a large outflow, and we have turned it into inflows and supported stabilisation of the rupiah exchange rate,’ Perry said at a press conference after the BI Board of Governors Meeting (RDG) in Jakarta on Wednesday. Amid the global volatility caused by the Middle East conflict, BI noted that capital flows in Q1 2026 recorded net outflows of USD 0.8 billion. Various policy responses undertaken could ultimately push foreign portfolio investment back in in Q2 2026, which recorded net inflows of USD 5.5 billion (as of 18 May 2026), mainly supported by foreign capital inflows into SRBI and government bonds (SBN) as yields on both instruments rose. The position of SRBI monetary instruments as of 18 May 2026 stood at Rp921.88 trillion, with non-resident ownership increasing to Rp221.59 trillion (24.04 per cent of total outstanding), thereby supporting efforts to maintain rupiah stability. BI also continues to bolster its rupiah-stabilisation policy with various instruments to counter worsening global volatility, amid high domestic demand for foreign exchange. To maintain rupiah stability, BI continues to intensify foreign exchange interventions, both through offshore non-deliverable forward (NDF) market interventions and spot and DNDF transactions in the domestic market. The central bank also strengthens forex market operational policy by adjusting thresholds for cash FX purchases against the rupiah without an underlying, increasing thresholds for DNDF/Forward sales, and raising thresholds for both buy and sell swaps, in force since April 2026. In addition, BI expands monetary operations with spot and swap instruments in offshore CNH and broadens local currency transactions for trade and investment. At end-April 2026, Indonesia’s foreign exchange reserves stood at USD 146.2 billion, enough to finance 5.8 months of imports or 5.6 months of imports and payments of government external debt, and above the international adequacy standard of around 3 months of imports. In the May 2026 Board of Governors meeting, the BI Rate was raised by 50 basis points from 4.75% to 5.25%. Note that this BI rate hike marks the first adjustment after the policy rate had been kept at 4.75% since September 2025. Throughout 2025, BI previously trimmed the policy rate five times for a total reduction of 125 basis points. With these policies, BI is confident the rupiah will tend to strengthen in July and August, after domestic demand for foreign exchange eases.