Interventions to Currency Swaps: BI and Government's Strategies to Safeguard the Rupiah
JAKARTA, KOMPAS.com – The rupiah’s exchange rate against the US dollar, which briefly breached the level above Rp17,400 in early May 2026, has prompted Bank Indonesia (BI) and the government to strengthen their policy responses.
The pressure on the rupiah is assessed not only from global dynamics but also influenced by domestic factors, both structural and seasonal.
BI Governor Perry Warjiyo stated that the short-term pressure on the rupiah is triggered by two main factors: global and domestic.
From the global side, the pressure stems from high world oil prices, persistently high US benchmark interest rates, the strengthening US dollar, and the rise in the 10-year US government bond yield to around 4.47 percent.
This situation is driving capital outflows from emerging market countries.
“There is capital flight from emerging markets, including Indonesia,” said Perry.
“April, May, June indeed see high demand for dollars. There are payments for dividend repatriation, debt payments, and also for Hajj pilgrims,” he explained.
In facing this pressure on the rupiah, BI has prepared seven strategic steps to maintain the stability of the rupiah’s exchange rate. Perry conveyed these steps directly to President Prabowo Subianto.
The first step is to strengthen interventions in the foreign exchange (forex) market, both in the domestic and offshore markets.
The second and third steps focus on strengthening capital flows and coordinating fiscal-monetary policies. BI is encouraging increased inflows through Bank Indonesia Rupiah Securities (SRBI) instruments to offset outflows from Government Securities (SBN) and stocks.
“We have already purchased SBN from the secondary market year-to-date amounting to Rp123.1 trillion. We will coordinate, including with the Finance Minister on buybacks and so on. Coordination between fiscal and monetary policies is very tight,” he clarified.
The next steps include keeping banking liquidity loose while tightening US dollar purchases in the domestic market.
“We will lower it again to 25,000 so that US dollar purchases up to or above 25,000 must have an underlying,” said Perry.
In addition, BI is strengthening offshore market interventions, increasing supervision of banking and corporate activities, and tightening coordination with the Financial Services Authority (OJK) to maintain financial system stability.
“Primarily, we are looking at corporate banks with high dollar buying activities; we are sending supervisors there in coordination with Ms Friderica Widyasari, Chair of OJK, to ensure financial system stability is maintained,” he added.