Rupiah Breaches Rp17,400: What Are BI's Steps?

Bank Indonesia (BI) has responded to the rupiah’s weakening, which has breached the Rp17,400 level per US dollar during trading on Tuesday (5/5/2026). The central bank assured that it will undertake stabilisation efforts for the rupiah’s exchange rate through various interventions. “Bank Indonesia will continue to be present in the market to ensure that market mechanisms function well in order to maintain the stability of the rupiah’s exchange rate in accordance with its fundamental value,” said Head of the Monetary and Securities Asset Management Department at BI, Erwin G. Hutapea, in an official statement on Tuesday (5/5/2026). Erwin explained that the rupiah’s movement since the start of the conflict in the Middle East until now remains in line with the majority of other emerging market currencies. He noted that the Philippine peso weakened by 6.58%, the Thai baht by 5.04%, the Indian rupee by 4.32%, the Chilean peso corrected by 4.24%, the Indonesian rupiah weakened by 3.65%, and the Korean won corrected by 2.29%. “Bank Indonesia will continue to optimise interventions in the foreign exchange market through non-deliverable forward (NDF) transactions in the offshore market, spot transactions, and domestic non-deliverable forward (DNDF) in the domestic market, as well as purchases of government bonds in the secondary market. These steps are carried out consistently to maintain the stability of the rupiah’s exchange rate amid ongoing global pressures,” he explained. Erwin emphasised that BI is committed to always being present in the market and taking necessary steps consistently and measurably to maintain the stability of the rupiah’s exchange rate. Impact of Middle East War Escalation Citing Bloomberg, during trading on Tuesday (5/5/2026), the rupiah opened breaching the position above Rp17,400 per US dollar. Observed around 11:29 WIB, the rupiah weakened by 40.50 points or 0.23% to the level of Rp17,434 per US dollar. “The rupiah is experiencing weakening, already above Rp17,400 per US dollar. My own target (prediction) for this week is at Rp17,550 per US dollar. One of the causes is the peak of the iceberg piling up in the Strait of Hormuz that has broken again and there was an attack from the US against Iranian forces in the Strait of Hormuz which killed many Iranian soldiers,” said Currency and Commodities Observer Ibrahim Assuaibi via voice message to reporters on Tuesday (5/5/2026). Ibrahim explained that US President Donald Trump has instructed the US Navy in the Gulf of Oman, international waters, to take control of the Strait of Hormuz—which was previously controlled by Iran. This has caused new tensions because more than five small Iranian warships were bombed and destroyed. “Trump himself has said that US forces are like pirates. Meaning, ships exiting the Strait of Hormuz will be pirated and controlled by the US, so Iran suffers losses of nearly over 5 billion US dollars. On the other hand, the US wants ships currently stuck in the Strait of Hormuz to return to normal and enter and exit international waters without any fees at all,” he clarified.