Rupiah Weakens to 17,400 Level, BI Governor Cites Global and Seasonal Factors
JAKARTA, KOMPAS.com - Bank Indonesia Governor Perry Warjiyo has commented on the weakening of the rupiah exchange rate, which has now surpassed the Rp17,400 per US dollar level.
Perry explained that the depreciation of the rupiah is influenced by a combination of global and domestic factors.
“Why is there pressure on the exchange rate in the short term? There are two reasons: global factors and then seasonal factors,” Perry stated during a press conference of the Financial System Stability Committee (KSSK) at Merdeka Palace, Jakarta, on Tuesday (5/5/2026).
From the global perspective, several external sentiments are pressuring the rupiah’s movement.
In addition, the rise in the yield on 10-year US government bonds to around 4.47 per cent is driving capital outflows from emerging markets, including Indonesia.
“This is resulting in capital flight from emerging markets, including Indonesia,” Perry said.
Meanwhile, from the domestic side, the weakening of the rupiah is more influenced by seasonal factors that are causing a significant increase in demand for US dollars domestically.
“April, May, June is indeed a period of high demand for dollars. There are dividend repatriations, debt payments, and also for Hajj pilgrims,” he revealed.
Nevertheless, Perry emphasised that fundamentally, the current rupiah exchange rate is undervalued or below its fair value.
Therefore, the central bank is optimistic that the Garuda’s currency will stabilise again and tend to strengthen in the future.
“Why undervalued? Our fundamentals are strong. Growth is very high at 5.61 per cent, inflation is low, credit is also growing high, foreign reserves are strong. These are fundamentals that indicate the rupiah should stabilise and tend to strengthen,” he explained.
For information, at the close of trading today, Tuesday (5/5/2026), the rupiah exchange rate weakened again.
The rupiah fell 30 points or 0.17 per cent to the level of Rp17,424 per US dollar.
BI noted that the rupiah has weakened by 3.65 per cent since the beginning of geopolitical tensions in the Middle East. This weakening is in line with the depreciation of several emerging market currencies.
The Philippine peso weakened by 6.58 per cent. The Thai baht fell 5.04 per cent. The Indian rupee corrected by 4.32 per cent. The Chilean peso weakened by 4.24 per cent. The South Korean won fell 2.29 per cent.
Previously, the Head of the Monetary and Asset Management Department of BI, Erwin Gunawan Hutapea, stated that BI will continue to be present in the market to ensure that the market mechanism runs well, while keeping the rupiah exchange rate moving in line with domestic economic fundamentals.
To maintain stability, BI is optimising various foreign exchange market operation instruments, including Non-Deliverable Forward (NDF) transactions in the offshore market, spot and Domestic Non-Deliverable Forward (DNDF) transactions in the domestic market, as well as purchases of Government Securities (SBN) in the secondary market.
“These steps are carried out consistently to maintain rupiah exchange rate stability amid ongoing global pressures,” Erwin told the media on Tuesday.