Protecting the Rupiah: BI and Government Coordinate to Improve Current Account

Synergy and coordination represent a commitment expressed by the Governor of Bank Indonesia (BI) to maintain stability while simultaneously driving economic growth.

Bank Indonesia has stated its commitment to coordinate with the government to improve the structure of the current account, which is currently experiencing a deficit, in order to support the stability of the rupiah exchange rate. The current account balance in the second quarter of 2026 recorded a deficit of US$12.5 billion, or 3.3 per cent of Gross Domestic Product (GDP), an increase from the US$3.6 billion deficit recorded in the first quarter of 2026 (1.0 per cent of GDP).

“Synergy is being undertaken not only within the Financial System Stability Committee (KSSK), but also with ministries and agencies, particularly regarding exchange rate stability, so that the structure of our Balance of Payments (BOP) or our current account can be improved,” said Erwin G. Hutapea, Executive Director and Head of the Monetary Management and Securities Assets Department at BI, during a media briefing in Jakarta on Wednesday.

According to him, improving the current account structure is expected to be achieved through increased exports and the management of imports, including payments related to import requirements. “This means exports can increase and imports can certainly be better managed, particularly regarding payments related to import obligations,” he added.

Erwin stated that synergy and coordination are commitments previously conveyed by the BI Governor to maintain stability and encourage economic growth. He noted that this is crucial given that there are structural issues that BI cannot address alone.

Regarding the management of exports and imports, for instance, he said that BI is monitoring the implementation of the new Government Regulation (PP) concerning Export Proceeds (DHE), including the supply of foreign exchange from designated banks into the domestic market.

Erwin added that BI also hopes that incoming foreign capital flows are not merely short-term or ‘hot money’. For portfolio investment, BI prefers long-term or ‘real money’ investors, as well as direct investment or Foreign Direct Investment (FDI).

In general, he explained that exchange rate movements cannot be separated from the economic structure and fundamentals, particularly the condition of the current account. “When a country has a current account deficit, it means the demand for foreign exchange is greater than its production, so the exchange rate movement will follow that situation. Therefore, our task is to maintain stability,” Erwin said.

In this context, BI is also striving to balance the balance of payments by encouraging foreign capital inflows into capital and financial transactions. “In addition to coordinating with relevant ministries and agencies to improve structural conditions, Bank Indonesia is attempting to balance this by encouraging foreign capital inflows into the capital account to ensure the balance of foreign exchange supply and demand is maintained through our policies,” he said.

Erwin added that the effort to maintain the stability of the rupiah is part of BI’s commitment to providing certainty to economic actors in their decision-making processes.

Regarding volatility, he noted that the rupiah’s movement remains relatively lower compared to several peer countries. Based on BI data as of 29 September 2026, rupiah volatility was recorded at 7.30 per cent, compared to South Korea at 15.59 per cent, the Philippines at 8.74 per cent, and Malaysia at 8.59 per cent.

Meanwhile, for the year-to-date (YTD) period ending 29 September, the rupiah recorded a depreciation of 7.74 per cent compared to its position at the end of the previous year. As of Wednesday (30/9) afternoon, the rupiah exchange rate based on the Jakarta Interbank Spot Dollar Rate (JISDOR) stood at Rp17,877 per US dollar.