Rupiah strengthens amid strong APBN position to face US-Iran conflict impact

Jakarta (ANTARA) - The rupiah exchange rate closed stronger today, gaining 57 points or 0.33 percent to Rp17,229 per US dollar from the previous close at Rp17,286 per US dollar. Currency and commodity economic observer Ibrahim Assuaibi stated that the rupiah’s strengthening is supported by the government’s confidence that the current State Revenue and Expenditure Budget (APBN) is in a strong position to face pressures from the Middle East conflict, which has caused energy commodity prices to surge. “When crude oil prices are highly volatile and above the 2026 APBN macro assumption, namely above 100 US dollars per barrel, the government can still hold back price increases, particularly for subsidised domestic fuel (BBM), without having to drain the APBN reserves in the form of the Budget Surplus Balance (SAL),” he said in a written statement in Jakarta on Friday. Currently, the government’s SAL, with a total nominal value of Rp423 trillion, has not yet been used to address subsidy spending pressures due to rising energy commodity prices. With the APBN’s capacity to still carry out efficiency and reallocation of expenditures to priority sectors, he continued, the government claims to remain calm in managing the 2026 APBN deficit in line with the target of below 3 percent of GDP, as stipulated in the State Finance Law. Bank Indonesia has also affirmed that it will maximise all monetary policy mixes. Interventions are being carried out simultaneously in the offshore Non-Deliverable Forward (NDF) market, the spot market, and the domestic Domestic Non-Deliverable Forward (DNDF) market. “Not only that, BI is also expanding foreign exchange monetary operations, including through spot and swap transactions based on offshore yuan, as an effort to strengthen rupiah currency stability while encouraging the use of local currencies in transactions,” said Ibrahim. Bank Indonesia’s Jakarta Interbank Spot Dollar Rate (JISDOR) today also moved stronger to Rp17,278 per US dollar from the previous Rp17,308 per US dollar.