Rupiah Weakens, Purbaya: That is the Central Bank's Jurisdiction

The government, specifically Finance Minister Purbaya Yudhi Sadewa, has reaffirmed that the handling of rupiah exchange rate volatility is left to Bank Indonesia (BI) as the authority mandated to maintain currency stability. Nevertheless, coordination between the government and the central bank continues routinely and can be intensified if necessary.

Purbaya stated that the government currently sees no need to convene a special meeting regarding the weakening of the rupiah, which has approached the level of Rp18,000 per US dollar in recent days. “Firstly, maintaining the exchange rate is within the jurisdiction of the Central Bank. We will let them proceed. We will continue to hold our regular periodic meetings,” Purbaya said in Jakarta on Wednesday.

He added that the government would open space for more intensive coordination should there be a need to strengthen exchange rate stability. However, for now, managing rupiah movements remains within BI’s authority. “If there is coordination that can be increased to improve the exchange rate, we will do it. But currently, it is still within our Central Bank’s jurisdiction. Unless the Central Bank requests an emergency meeting, we will hold one quickly,” he said.

Responding to the recent depreciation of the rupiah, Purbaya assessed that the movement is inseparable from various sentiments and rumours circulating in the market. He specifically addressed rumours claiming he had requested banks to conduct stress tests if the rupiah breached the Rp18,000 per US dollar level, clarifying that such information is untrue. “There are claims that I ordered banks to perform stress tests if the rupiah exceeds Rp18,000. I have never issued such an instruction,” he asserted.

Purbaya noted that various market rumours can influence market participants’ perceptions and drive negative sentiment towards the rupiah in the short term. However, he emphasised that the government’s primary focus remains on maintaining a strong national economic foundation to support long-term stability. “My obligation is to maintain the economic foundation so that the economy continues to grow faster. Ultimately, we believe the rupiah will be determined by the economic foundation. Therefore, my focus is there,” he concluded.