BI Says Economy Resilient Amid Global Uncertainty
Pejabat Sementara (PJs) Governor of Bank Indonesia (BI) Destry Damayanti stated that economic data throughout the first two quarters of 2026 showed resilient conditions. However, BI emphasised that external resilience needs to be continuously strengthened.
“External resilience needs to be continuously strengthened to mitigate the spillover effects of high global uncertainty,” Destry said during a Financial System Stability Committee (KSSK) press conference at the Indonesia Deposit Insurance Corporation (LPS) building in Jakarta on Monday (3/8/2026).
She explained that the trade balance from January to May 2026 recorded a surplus of USD 4.03 billion. Meanwhile, in May 2026, the trade balance recorded a deficit of USD 1.61 billion.
Foreign portfolio investment flows in the second quarter of 2026 recorded net inflows of USD 8.5 billion, mainly supported by Government Securities (SBN) and Bank Indonesia Rupiah Securities (SRBI). This trend continued into the third quarter of 2026, driven by rising yields on domestic financial instruments.
The rupiah strengthened to IDR 17,994 per US dollar on 31 July 2026, after weakening since mid-July 2026 due to escalating conflict in the Middle East and strengthening market expectations of a Fed Funds Rate (FFR) hike. The rupiah exchange rate against the US dollar was slightly weaker compared to the end of June 2026 level of IDR 17,880.
Indonesia’s foreign exchange reserves at the end of June 2026 remained solid at USD 145.6 billion, equivalent to financing 5.5 months of imports or 5.4 months of imports and government external debt payments, and well above the international adequacy standard of around three months of imports.
Second-quarter 2026 inflation remained within the target range. Consumer Price Index (CPI) inflation in June 2026 was recorded at 3.34 percent year-on-year (yoy), slightly higher than the previous month’s realisation of 3.08 percent yoy. Core inflation was maintained at 2.76 percent yoy, despite a slight increase from the previous month, supported by BI’s consistent policy stance in achieving the inflation target.
Administered prices (AP) inflation rose to 3.42 percent yoy, driven by adjustments in non-subsidised fuel and avtur prices due to high global energy prices. However, Destry noted that the government continues to ensure that subsidised fuel prices remain affordable for the public.
Meanwhile, volatile food (VF) inflation was recorded at 5.58 percent yoy, driven by inflation in key food commodities due to declining production in production centres, rising transportation costs, and the end of the main harvest season. Efforts to control inflation to maintain public purchasing power were also strengthened through various government policies, such as transport discount stimulus during the school holiday period and food assistance.
“Going forward, inflation in 2026 and 2027 is forecast to remain within the target range of 2.5±1 percent, supported by consistent monetary policy and government policies in controlling prices,” she said.
In addition, the synergy between the government and BI through the Central/Regional Inflation Control Teams (TPIP/TPID) by strengthening the implementation of the Inflation Control and Food Security Movement (GPIPS) also helps keep inflation under control, including anticipating the risk of weather disruptions (El Nino) on food prices.