Rupiah Drops to Rp 18,000 Level; BI Cites Middle East Geopolitics and Oil Prices as Triggers
Jakarta, VIVA – The Senior Deputy Governor of Bank Indonesia (BI), Destry Damayanti, has provided an explanation regarding the stability of the Rupiah exchange rate, which today touched the Rp 18,000 level per US dollar. As of 13:28 WIB, the Rupiah was trading at Rp 18,044 per US dollar, weakening by 77 points or 0.43 per cent from its previous position of Rp 17,967 per US dollar.
Destry stated that the weakening of the Rupiah continues to be influenced by geopolitical tensions in the Middle East, which have re-escalated and hindered peace prospects. This has kept oil prices high, increasing the risk of global inflation and driving capital outflows from emerging markets. “Additionally, domestic demand remains quite high in line with dividend repatriation patterns and external debt payments,” Destry said in a statement on Thursday, 4 June 2026.
She ensured that Bank Indonesia will continue to be present in the market and increase the intensity of interventions to ensure that market mechanisms function properly and that the stability of the Rupiah exchange rate is maintained in accordance with its fundamentals. “Furthermore, we will strengthen the interest rate structure of pro-market monetary instruments to remain attractive for capital inflows into domestic asset instruments,” she added.
Continuous intervention will also be carried out consistently, including through Non-Deliverable Forward (NDF) transactions in the offshore market, spot transactions, and Domestic Non-Deliverable Forward (DNDF) in the domestic market, accompanied by the purchase of government securities (SBN) in the secondary market. “Coordination and communication with corporations and other market participants are being conducted intensively,” said Destry.
Additionally, Bank Indonesia is encouraging the use of local currencies in bilateral cooperation through the Local Currency Transaction (LCT) scheme, as an effort to reduce dependence on the US dollar and mitigate exchange rate volatility risks. Such cooperation has been established with China, Japan, Malaysia, Thailand, South Korea, and the United Arab Emirates. The diversification of trade transactions through the LCT scheme continued to increase in April 2026, reaching approximately USD 22.7 billion, compared to approximately USD 25.7 billion for the full year of the previous year.
“In general, the weakening of the Rupiah is still in line with regional trends, with a year-to-date (ytd) decline of -7.44 per cent. Foreign exchange reserves remained maintained at the level of USD 146.2 billion at the end of April 2026,” she concluded.