Rupiah Strengthens Following Prabowo's Intervention
Jakarta, CNBC Indonesia - The rupiah exchange rate strengthened against the US dollar on Wednesday (6/5/2026) trading. The Garuda currency appreciated by 0.03% to Rp17,405 per US dollar at 11:27 WIB.
According to Refinitiv data, the rupiah opened today’s trading in the green zone with an appreciation of 0.34% to Rp17,350/US.Thisstrengtheningoccurredaftertherupiahclosedweakerby0.26 in the previous trading session.
Meanwhile, the US dollar index or DXY, which measures the strength of the greenback against six major world currencies, was observed weakening. As of 09:00 WIB, the DXY fell 0.21% to 98.234.
This rupiah strengthening came after a limited meeting of the Merah Putih Cabinet ministers and the Financial System Stability Committee (KSSK) at Merdeka Palace, Jakarta, on Tuesday (5/5/2026).
In the meeting, the President highlighted the dynamics of capital outflows occurring in the financial markets. Therefore, the government, together with relevant authorities, has reviewed the causal factors and prepared mitigation measures against this condition.
“And it was agreed, reported to Mr President, an agreement of cooperation between BI and the Minister of Finance so that going forward this can be maintained regarding capital outflow,” said Coordinating Minister for the Economy Airlangga Hartarto last night, Tuesday (5/5/2026).
To address the issue, Prabowo approved strategic steps by BI and the Minister of Finance to maintain rupiah stability. In response, BI prepared seven strategic steps. According to the BI Governor, these seven steps have been approved by President Prabowo.
“We reported to Mr President and Mr President approved and then provided strengthening of the seven important steps taken by Bank Indonesia to make the rupiah strong, to make the rupiah stable going forward,” said Perry in the conference.
The first BI step is to strengthen interventions in the foreign exchange market, both domestic and international, to stabilise the rupiah.
“Our foreign exchange reserves are more, so sufficient to carry out stabilisation of the rupiah exchange rate,” he explained.
The second and third steps focus on strengthening capital flows and fiscal-monetary coordination. Bank Indonesia, according to Perry, is encouraging increased inflows through Indonesian Rupiah Securities (SRBI) instruments to cover outflows from Government Securities (SBN) and stocks, as well as continuing to purchase SBN in the secondary market.
“We have purchased SBN from the secondary market year to date amounting to Rp123.1 trillion. We will carry out coordination, including later the Minister of Finance can handle buybacks and so on. Coordination is very close between fiscal and monetary,” said the BI Governor.
Next, the fourth and fifth steps cover maintaining loose banking liquidity, as well as restrictions on dollar purchases in the domestic market. “Previously 100 thousand dollars per person per month, we reduced it to 50 thousand dollars per person per month. That is what we directly coordinated with KSSK for strengthening,” he continued.
The sixth and seventh steps are strengthening offshore market interventions as well as increasing supervision of banking and corporate activities. In addition, supervision is tightened through coordination with the Financial Services Authority (OJK) to ensure financial system stability remains maintained.
“Primarily, we look at corporate banks with high dollar buying activities, we send supervisors there in coordination with Ms Frederica Widyasari, OJK Chair, to ensure how financial system stability is maintained,” said the BI Governor.
These steps affirm the proactive stance of the government and monetary authorities in maintaining rupiah stability. Amid global pressures, Indonesia not only survives but also prepares momentum for more solid strengthening going forward.
Finance Minister Purbaya Yudhi Sadewa also took steps to maintain rupiah exchange rate stability from US dollar pressures.
The method is not through intervention, but by reducing the country’s dependence on the US dollar, especially from the debt procurement side. He chose to issue new debt securities in China, named Panda Bonds denominated in yuan.
“To strengthen the exchange rate, we will also issue bonds in the form of Panda Bonds in China, with lower interest so that we are not too dependent on the dollar anymore,” said Purbaya in the State Palace area, Jakarta, quoted Wednesday (6/5/2026).
On various previous occasions, he has also revealed that the yield demanded by Chinese investors is only around 2.3%, much lower than the yield of benchmark 10-year government securities (SBN) which has been around 6%.
Therefore, he is confident that issuing Panda Bonds will improve the diversity of foreign exchange supply or forex in Indonesia. No longer dominated by the US dollar.
“So our diversification will be even better going forward. So our prospects are good, friends, no need to be afraid. Earlier, Mr President also told me to convey the message that my money is sufficient, there’s a lot of money, so you don’t need to be afraid,” he explained.