Economists Urge Government to Issue Global Bond to Stabilize the Rupiah Exchange Rate

Illustration. (Photo: Dok. Antara)

JAKARTA - Head of Trimegah Sekuritas Indonesia's Economist, Fakhrul Fulvian, encourages the government to issue global bonds, which indirectly can help Bank Indonesia (BI) stabilize the rupiah exchange rate and maintain dollar liquidity in the country.

He assessed that the issuance of global bonds in larger amounts would maintain the liquidity of the rupiah in the country as well as increase the liquidity of the dollar from the global market. In this way, the economy is considered to be protected from short-term volatility that currently needs to be anticipated.

"I really hope, hopefully the Ministry of Finance will increase the issuance of global bonds. I hope up to 20 percent of the total government funding this year. We need fiscal support to increase the supply of domestic dollars," said Fakhrul, in Jakarta, quoted by Antara, Thursday, January 22.

Fakhrul suggested that the government issue more global bonds, both in dollars and renminbi, because the demand is still high and its issuance will have a positive impact on Indonesia's foreign exchange reserves.

According to him, the issuance of global dollar bonds should also be carried out domestically. This refers to several cases of corporate bonds, where the demand for domestic US dollar bonds is recorded as high. This strategy is seen as helping to keep the dollar in Indonesia.

Fakhrul also reminded that the trade balance that generates the inflow of many dollars must be managed well so that it remains in the domestic financial system. If not, the dollar can flow abroad and this must be anticipated by the government.

He estimated that the average exchange rate of the rupiah this year will be in the range of Rp. 16,500 per US dollar. This is supported by a trade balance that remains positive and strong foreign exchange reserves, along with increasing income from the export of metal commodities such as tin and nickel.

Regarding the reference interest rate (BI-Rate) which was decided to remain at the level of 4.75 percent this month, he considered the central bank's move was appropriate given the weakening of the rupiah which has occurred recently to touch the level of Rp16,900 per US dollar.

According to him, this kind of weakening usually occurs when the market is in a risk-off condition, especially when the uncertainty in the United States is not clear. However, he noted that Indonesia's trade balance tends to be surplus, which is a support for the rupiah.

Fakhrul also views that the rupiah may be able to penetrate at the level of Rp17,000 per US dollar. However, this only happens in the short term and does not last long.

To note, BI through the Governor's Board Meeting (RDG) on January 20-21, 2026 decided to maintain the BI-Rate at 4.75 percent.

BI said, this decision is consistent with the current policy focus on efforts to stabilize the rupiah exchange rate from the impact of increasing global uncertainty. BI also continues to monitor the room for further reduction in the BI-Rate interest rate.

The interest rate that remains this time continues the policy that has not changed since September 2025. BI maintained the reference interest rate at the level of 4.75 percent after previously reducing it five times since the beginning of 2025, each by 25 bps, so that the total reduction reached 125 bps.

Facing this recent weakening, BI has increased the intensity of stabilization measures to maintain the stability of the rupiah exchange rate through interventions in the NDF market both off-shore and on-shore (DNDF) and the spot market.

BI estimates that the rupiah will be stable with a tendency to strengthen supported by attractive yields, low inflation, and the continued good prospects for Indonesia's economic growth.