Reasons Behind Rupiah Breaching Rp 17,300 and BI's Strategy to Stabilise Exchange Rate

JAKARTA, KOMPAS.com – The rupiah exchange rate weakened against the US dollar and briefly breached the Rp 17,300 per US dollar level. This rupiah depreciation is described as the lowest level in history. At the close of trading on Friday (24/4/2026), the rupiah stood at Rp 17,246 per US dollar. Bank Indonesia’s (BI) Director of the Department of Economic and Monetary Policy, Juli Budi Winantya, explained that the rupiah’s weakening is influenced by the impact of conflicts in the Middle East involving the United States (US), Israel, and Iran. Additionally, the conflict is also driving price increases that affect global inflation. “Inflation will be higher, from 4.1 percent to an estimated 4.2 percent,” said Juli during BI’s Focus Group Discussion on Friday (24/4/2026). Juli stated that the global conditions impacting the real sector are also affecting the financial sector, one of which is narrowing the room for global monetary policy easing. He added that the US’s involvement in the Middle East conflict is also increasing that country’s defence spending, which has the potential to widen the US fiscal deficit. This condition, according to Juli, could drive an increase in US government bond yields (US Treasury), which in turn triggers capital movements from both advanced and developing countries to the US. “Attractiveness (investment appeal) of the US is increasing,” Juli said. From the domestic side, Juli mentioned that Indonesia’s economic growth this year is expected to be in the range of 4.9 percent to 5.7 percent. Support from fiscal stimulus, monetary policy, and the central bank’s policy mix is said to be directed towards supporting that growth target. Meanwhile, inflation in 2026 and 2027 is predicted to remain stable at 2.5 percent plus or minus 1 percent.