Dollar breaches Rp16,910, BI Governor: Firm intervention to be carried out

Jakarta, CNBC Indonesia - The rupiah exchange rate again came under pressure on Wednesday, 4 March 2026. The currency opened at Rp16,910 per US dollar, weakening 0.36 percent. This followed a day earlier on Tuesday 3 March 2026 when the rupiah closed slightly firmer, up 0.03 percent at Rp16,850 per US dollar. At 09:00 WIB, the US dollar index (DXY), which measures the greenback against six major currencies, was in positive territory, up 0.15 percent to 99.200. Destry Damayanti, Senior Deputy Governor of Bank Indonesia, said BI would continue to be present in the market to maintain exchange-rate stability to prevent impacts from the widening Middle East conflict. Destry said the central bank would carry out firm and consistent interventions through Non-Deliverable Forward (NDF) transactions in the offshore market, spot trades and Domestic Non-Deliverable Forward (DNDF) transactions in the domestic market, along with purchases of government securities (SBN) in the secondary market. ‘Rupiah weakness remains aligned with regional peers; on a year-to-date basis it has depreciated 0.51%, which is relatively better than the region. Foreign-exchange reserves remained at US$154.6 billion at end-January 2026, and foreign capital inflows into the domestic financial market in 2026 stood at Rp25.7 trillion,’ Destry said in an official statement on Wednesday 4 March 2026. Rupiah movements today are still heavily influenced by external sentiment, particularly rising geopolitical tensions in the Middle East among Iran, the United States and Israel. This has increased global market uncertainty and led investors to move away from risk assets. Against this backdrop, the dollar has strengthened again as it is seen as a safe-haven currency. Investor demand for the dollar rose as global markets shifted to risk-off. Pressure in the market also stems from Israel and the US strikes on several targets in Iran, triggering fresh concerns about inflation and energy-supply disruptions. Global oil and gas prices have surged as the US-Israel conflict with Iran hampers energy exports from the Middle East. Tehran’s attacks on ships and energy facilities have disrupted shipping lanes in the Gulf and forced production to be halted in several countries, from Qatar to Iraq. This situation has reinforced demand for the US dollar and put pressure on other currencies, including those of emerging markets such as the rupiah.