Dollar Strong at Rp18,000, BI Asserts It Has 7 Arsenal to Stabilise Rupiah

Bank Indonesia (BI) has asserted that the central bank still has seven arsenals for stabilising the rupiah exchange rate, which is currently under significant pressure. The rupiah exchange rate came under renewed pressure against the US dollar at the opening of trade on Friday (5/6/2026). Citing Refinitiv data, the rupiah opened down 0.17% at Rp18,050/US$. That position is the weakest level in the rupiah’s history against the US dollar. The seven policy measures include strengthening intervention in the foreign exchange market both at home and abroad through spot transactions and Non-Deliverable Forwards (DNDF) in the domestic market and Non-Deliverable Forwards (NDF) in global financial centres on a continuous, around-the-clock basis. Secondly, efforts to optimise the SRBI instrument so that rupiah assets remain attractive. “Bank Indonesia has also raised the SRBI interest rate in recent months. This policy is considered to have succeeded in encouraging foreign capital inflows back into the domestic financial market after a previous outflow,” BI wrote on its Instagram account @bank_indonesia on Friday. The inflow of capital flows helps strengthen the rupiah exchange rate stability and supports the adequacy of foreign exchange supply in the country. Third is the effort to purchase Government Securities (SBN) on the secondary market as a form of fiscal and monetary synergy. To maintain liquidity adequacy in the money market and banking sector, as well as a form of close synergy between monetary and fiscal policy, “Bank Indonesia has also purchased SBN which in 2026 (as of 19 May 2026) reached Rp140.57 trillion, including purchases on the secondary market of Rp73.28 trillion,” BI explained. Fourth, BI will maintain liquidity adequacy in the banking and money markets by keeping base money (M0) growth above 10% in accordance with monetary expansion. “Purchases of SBN on the secondary market are carried out in accordance with market mechanisms, are measurable, transparent, and consistent with the monetary programme in maintaining economic stability and preserving the credibility of monetary policy in maintaining liquidity in the money market and banking,” BI emphasised. Fifth, efforts to strengthen foreign exchange market transaction policy through implementing a reduction in the cash threshold for buying foreign currency against the rupiah without underlying to US$25,000 per participant per month effective June 2026, as well as expanding Yuan and Rupiah transactions domestically within the framework of Local Currency Transaction (LCT). Sixth, strengthening intervention in the offshore NDF market, expanding banking participation in offshore NDF transactions selling foreign currency against the rupiah in overseas markets for Primary PUVA Dealers that meet BI’s requirements. Lastly, BI will strengthen supervision of banks and corporations with high US dollar purchasing activity through close coordination with the Financial Services Authority (OJK). In addition, BI claims it continues to boost economic growth. First, by maintaining liquidity adequacy, carried out among others through purchasing SBN on the secondary market and keeping base money growth high. Second, strengthening macroprudential liquidity incentives (KLM). In this regard, BI encourages increased bank lending and financing to priority sectors, such as agriculture, industry and downstreaming, services including the creative economy, construction, real estate and housing, as well as MSMEs, cooperatives, inclusion, and sustainable sectors. Third, relaxing banking intermediation policy. BI is expanding the scope of the Macroprudential Intermediation Ratio (RIM) so that banks have greater flexibility in collecting and distributing funds as of 1 July 2026. Fourth is strengthening synergy through the PINISI programme. BI, together with the Government, OJK, banking, and the business world, continues to strengthen coordination through the National Intermediation Acceleration Programme so that economic financing can grow more optimally. Fifth, encouraging economic and payment system digitisation. BI continues to expand economic digitisation through strengthening QRIS, including cross-border QRIS, as well as developing digital entrepreneurs through the Indonesian Digital Innovation Centre (PIDI) programme.