Positive BI-Rate Increase, the Rupiah Strengthens and Foreign Capital Flows Begin to Enter

JAKARTA - The rupiah exchange rate showed a significant strengthening against the US dollar in Friday, June 12, 2026 trading.

The rupiah closed at Rp17,865 per US dollar, or strengthened 0.84 percent compared to the closing position on June 5, 2026 which was in the range of Rp18,010 per US dollar.

Senior Deputy Governor of Bank Indonesia Destry Damayanti said that the strengthening of the rupiah reflected the market's increasing confidence in the effectiveness of the monetary policy mix and stabilization taken by Bank Indonesia.

"The policy includes an increase in the BI-Rate to 5.50 percent, strengthening the interest rate structure of SRBI, providing hedging swap incentives for foreign investors, opening repo access to support banking liquidity, and increasing the intensity of rupiah and foreign exchange monetary operations," he explained. in his statement, Friday, June 12.

He added that these steps were also supported by close synergy between Bank Indonesia and the government.

According to Destry, after the increase in the benchmark interest rate, foreign capital flows began to show a fairly strong increase.

He added that investor interest in domestic financial instruments was reflected in the inflow of foreign funds into non-resident SRBI and State Securities (SBN) which on June 10 and 11, 2026, reached Rp15.11 trillion and Rp3.91 trillion, respectively.

In addition, Destry said, positive sentiment was also driven by the success of the initial issuance of Danantara's international bonds, which recorded sales of IDR 26.9 trillion.

According to him, this achievement is considered a strong indication that global investors' confidence in Indonesia's economic and financial asset prospects remains intact.

On the external side, he said Bank Indonesia continues to strengthen international cooperation through collaboration with the People's Bank of China (PBOC) and the Hong Kong Monetary Authority (HKMA).

Destry said the cooperation resulted in a number of strategic agreements, including synergies to strengthen not only the financial resilience of each country but also broader regional financial stability, strengthening the Bilateral Currency Swap Agreement (BCSA) and expanding the use of local currencies through the Local Currency Transaction (LCT) scheme.

"This step will reduce dependence on the US dollar and support the stability of the rupiah exchange rate," he said.

Destry said Bank Indonesia emphasized that it would continue to optimize all of the policy instruments it had and strengthen coordination with the government and other stakeholders to maintain exchange rate stability and strengthen the external resilience of the national economy.

"With the various developments above, it is believed that the rupiah will continue to strengthen against the US dollar towards its fundamental level," he said.