Indef: Currency swaps help stabilise the rupiah in the short term
Jakarta (ANTARA) - Executive Director of the Institute for Development of Economics and Finance (Indef) Esther Sri Astuti believes that currency swap cooperation between countries can help maintain the stability of the rupiah exchange rate in the short term amid pressures from global dynamics.
“I think currency swaps have their positives, but this is not a long-term solution,” Esther told ANTARA in Jakarta on Thursday.
She explained that one positive impact of the policy is helping to curb the rupiah’s depreciation against foreign currencies by strengthening access to foreign currency liquidity.
Additionally, non-dollar financing cooperation is seen as able to strengthen foreign exchange reserves and support transaction needs as well as foreign debt payments.
“Strengthening liquidity bolsters foreign exchange reserves and ensures the availability of funds for transaction needs or foreign debt payments,” Esther said.
According to her, diversifying financing is also important to reduce dependence on the US dollar through the use of local currencies in international transactions.
She added that the cross currency swap scheme can also help businesses mitigate risks from exchange rate and interest rate fluctuations.
Based on Bank Indonesia data, Indonesia’s foreign exchange reserves position as of the end of March 2026 was recorded at $148.4 billion, which is considered sufficient to support external sector stability and the national financial system.
Meanwhile, the rupiah exchange rate closed stronger at around Rp17,387 per US dollar in Wednesday’s trading (6/5) after the previous close at Rp17,424 per US dollar.
Nevertheless, Esther cautioned that the policy is not a long-term solution for strengthening domestic economic fundamentals.
“Swaps are a temporary stabilisation tool, not the main remedy for strengthening domestic economic fundamentals,” she said.
She believes that strengthening economic fundamentals still needs to be done through enhancing liquidity and diversifying financing to avoid excessive reliance on the US dollar.
Esther views that Bank Indonesia still needs to maintain exchange rate stability through market operations if foreign exchange reserves are deemed adequate.
“Bank Indonesia must also conduct market operations to stabilise the exchange rate, provided that US dollar reserves are sufficient,” she said.
Previously, Coordinating Minister for the Economy Airlangga Hartarto stated that the government, together with Bank Indonesia, is preparing currency swap cooperation with China, Japan, South Korea, and several other countries as one of the steps to maintain rupiah stability.
Bank Indonesia Governor Perry Warjiyo also stated that BI is preparing several steps to strengthen the rupiah, including interventions in the foreign exchange market and strengthening inflows of capital, supported by foreign exchange reserves that are deemed more than sufficient to maintain exchange rate stability.