Rupiah Breaches 18,000 Mark, BI Ramps Up Intervention Intensity

Bank Indonesia (BI) has addressed the depreciation of the rupiah, which has touched Rp18,000 per US dollar. Senior Deputy Governor Destry Damayanti stated the exchange rate weakness remains influenced by escalating geopolitical tensions in the Middle East, hampering peace prospects. This has kept oil prices elevated and increased global inflation risks as well as capital outflows from emerging countries. “Additionally, domestic demand remains quite substantial, in line with the pattern of dividend repatriation and external debt payments,” Destry said in a statement on Thursday (4/6). She noted that BI will continue to be present in the market and will increase the intensity of its intervention. The aim is to ensure market mechanisms function properly and that rupiah exchange rate stability is maintained in line with its fundamentals. BI will also strengthen the interest rate structure of pro-market monetary instruments to keep attracting capital inflows into domestic asset instruments. Destry said consistent and continuous intervention will be carried out through Non-Deliverable Forward (NDF) transactions in the offshore market, spot transactions and Domestic Non-Deliverable Forwards (DNDF) in the domestic market, accompanied by purchases of government securities in the secondary market. “Coordination and communication with corporations and other market players are being carried out intensively,” she added. Furthermore, Bank Indonesia is promoting the use of local currencies in bilateral cooperation through the Local Currency Transaction (LCT) scheme. This is an effort to reduce dependence on the US dollar and mitigate the risk of exchange rate volatility. Such cooperation has been established with China, Japan, Malaysia, Thailand, South Korea, and the United Arab Emirates. “Diversification of trade transactions through the LCT scheme continues to increase, reaching approximately US$22.7 billion in April, compared to around US$25.7 billion for the full year last year,” Destry stated. “Overall, the rupiah’s depreciation is still in line with the regional trend, weakening -7.44% year-to-date. Foreign exchange reserves remain adequate at US$146.2 billion at the end of April 2026,” she concluded.