Global pressures intensify, BI ramps up market interventions to safeguard the rupiah
Bandung (ANTARA) - Bank Indonesia is increasing the intensity of interventions in the financial markets to maintain the stability of the rupiah exchange rate, following escalating external economic volatility due to intensifying global geopolitical tensions.
Director of the Department of Economic and Monetary Policy (DKEM) at BI, Juli Budi Winantya, stated during a media meeting in Bandung on Friday that BI is strengthening interventions, both through the spot market, domestic non-deliverable forwards (DNDF), including transactions in the offshore market.
In addition, BI is optimising its monetary policy mix, including strengthening money market instruments to maintain exchange rate stability while supporting external economic resilience.
The central bank projects Indonesia’s economic growth for 2026 to be in the range of 4.9-5.7 per cent and sets an inflation target of 2.5 per cent with a 1 per cent deviation.
At present, Juli said, external pressures have not subsided. These pressures stem from geopolitical conflicts in the Middle East, which are driving up energy and commodity prices due to disruptions in production and distribution in that region’s oil fields and global shipping routes.
These disruptions are causing global food and commodity prices to rise, which is fuelling inflationary pressures. Therefore, BI has revised down its global economic growth projection to 3 per cent from 3.1 per cent, while inflation is now projected at 4.2 per cent from 4.1 per cent.
Due to the lower global economic growth projection alongside rising inflation, BI sees limited room for global monetary policy easing.
The direction of policies by central banks worldwide, including the Federal Reserve, is expected to hold interest rates higher for longer due to global geopolitical tensions.
This situation is driving up yields on US government bonds (US Treasuries) and strengthening the US dollar, thereby increasing pressure on capital flows to emerging markets, including Indonesia.
“The attractiveness of US financial assets is increasing, leading to a shift in global capital flows,” he said.
Juli noted that Indonesia’s trade balance still records a surplus, primarily supported by the performance of non-oil and gas exports. Meanwhile, foreign exchange reserves in March 2026 were recorded at a high of $148.2 billion, sufficient to support external stability.
BI pledges to continue monitoring global developments and strengthening policy responses to maintain macroeconomic and national financial system stability.
The rupiah exchange rate closed at Rp17,229 per US dollar in trading on Friday (24/4), strengthening by 57 points or 0.33 per cent from the previous close at Rp17,286 per US dollar. On Thursday (23/4), the rupiah exchange rate weakened, breaching the Rp17,304 per US dollar level.