Rupiah Breaches 17,500 Level: Bank Indonesia Explains the Causes
JAKARTA, KOMPAS.com - Bank Indonesia (BI) has revealed that the weakening of the rupiah exchange rate, which breached the Rp17,500 per US dollar level in trading today, Tuesday (12/5/2026), is influenced by a combination of global and domestic factors.
Senior Deputy Governor of BI, Destry Damayanti, stated that pressure on the rupiah has intensified alongside the escalation of conflict in the Middle East region, which is driving up global oil prices and increasing uncertainty.
“Pressure on the rupiah today has increased due to the ongoing conflict in the Middle East with rising intensity,” Destry told Kompas.com on Tuesday.
BI noted that the seasonal increase in foreign exchange needs is adding pressure to the market.
Destry explained that the increased demand for US dollars stems from external debt payments, corporate dividend distributions, and public needs for Hajj pilgrimage.
“From the domestic side, there is an increase in seasonal dollar needs,” said Destry.
Nevertheless, BI assures that it continues to be present in the market to maintain rupiah exchange rate stability.
To date, the central bank continues to conduct measured interventions through the spot market, Domestic Non-Deliverable Forward (DNDF), and Non-Deliverable Forward (NDF), while optimising all monetary operation instruments.
“BI will continue to commit to always being in the market and optimising the use of all monetary operation instruments, so it is hoped that this can reduce pressure on the rupiah,” she said.
Amid the rupiah pressure, BI also sees that foreign investor confidence in domestic financial assets remains intact.
This is reflected in the inflow of foreign capital, particularly into the government securities (SBN) market and Bank Indonesia Rupiah Securities (SRBI).
Based on BI data, inflows into the SBN and SRBI markets in April 2026 reached Rp61.6 trillion.
Additionally, domestic foreign exchange liquidity is deemed sufficient.
BI recorded third-party funds (DPK) in foreign currency growth of 10.9 per cent year to date as of the end of March 2026.
“BI estimates that this seasonal pressure will subside, allowing the rupiah exchange rate to return to its fundamental level,” she stated.
According to Bloomberg data, the rupiah in the spot market closed weaker by 115 points or 0.66 per cent at Rp17,529 per US dollar. This position marks the all-time low closing rate for the rupiah against the US dollar in history.
Meanwhile, today’s BI Jisdor rate stands at Rp17,514 per US dollar, weakening by 99 points from yesterday’s level of 17,415.