Rp17,600/US$ exchange rate forecast won't last long, Purbaya: Dollar holders, sell!

Jakarta, CNBC Indonesia – Finance Minister Purbaya Yudhi Sadewa expressed confidence that the rupiah exchange rate against the United States dollar, currently hovering at around Rp17,600 per US, wouldnotstaythereforlong.Sincethestartoftheweek, therupiahhasremainedataboveRp17, 600perUS. According to Refinitiv data, on Tuesday at 09:13 WIB, the rupiah weakened to Rp17,700 per US, beforeclosingatRp17, 695perUS. “Remember, the rupiah will not linger at this level for long,” Purbaya said in his office in Jakarta on Wednesday (19/5/2026). He stressed that his confidence is grounded in the continued strength of foreign capital inflows bringing US dollars into Indonesia, a result of his policy to stabilise the bond market by buying government securities from global investors. “Earlier, we saw improved sentiment in the bond market. Funds began to flow in here, and I think more will come in the future so the rupiah will strengthen,” he said. He said he has been conducting buybacks of government bonds (SBN) sold by investors since Wednesday (13/5/2026). At that time he bought back bonds worth Rp100 billion from investors. Then, at the start of this week Rp830 billion, and on Tuesday Rp1.29 trillion. He is preparing funds amounting to Rp2 trillion per day for the SBN buyback policy under the cash management mechanism contained in the 2026 State Budget (APBN 2026). The bonds bought back are used for state treasury operations, including resale to investors later. With buyback realised below the Rp2 trillion cap, Purbaya argues that there are relatively few investors selling government bonds because sentiment remains positive to hold sovereign debt and to maintain the domestic dollar supply. “There is nobody selling. It means they value that asset and selling would be profitable for the rupiah, so our government securities remain credible. If they sell, I buy. So foreigners aren’t letting go either,” he said. From the policy results, which he initially described as using the Bond Stabilization Fund (BSF) mechanism, total foreign inflows remained up to Rp1.3 trillion as of Tuesday, strengthening the dollar supply domestically. Therefore, he is confident the rupiah will strengthen again soon, and he did not hesitate to urge dollar holders to release their holdings because the Rp17,600/US$ level will not last much longer. “If you are holding dollars now, just sell them,” Purbaya said. Nevertheless, Purbaya emphasised that the Ministry of Finance does not set a specific exchange-rate level through this policy. He only intends to help BI in maintaining stability of the rupiah’s movements amid high dollar demand in this period. “There is no exchange-rate target. It is not the Ministry of Finance’s business. That is the central bank’s concern. What is clear is that we will act to give the rupiah some breathing space,” he said.