JAKARTA - Minister of Finance Purbaya Yudhi Sadewa responded to the weakening of the rupiah exchange rate which had touched the level of Rp17,500 per US dollar.
According to him, the issue of exchange rate stability is the domain of Bank Indonesia (BI) as an institution that has the authority to maintain exchange rate stability.
However, Purbaya stated that the government would start supporting BI's steps to reduce pressure on the rupiah from tomorrow, and this support was carried out through intervention in the bond market.
"We will start helping (BI) tomorrow, maybe (the government) will enter the bond market," he told the media, Tuesday, May 12.
Purbaya explained that this step was carried out through the utilization of the Bond Stabilization Fund (BSF) which will be activated on a number of domestic financial instruments.
"By entering the bond market, that is the Bond Stabilization Fund, but not all funds. We activate the instruments we have here. Tomorrow it starts," said Purbaya.
He explained that this step was taken through the Bond Stabilization Fund (BSF) scheme which will be optimized on a number of domestic financial instruments.
According to him, the mechanism will start tomorrow by utilizing the instruments that the government has.
Purbaya assessed that intervention in the bond market was important to ensure that yields did not soar too high, and if yields increased sharply, foreign investors holding domestic bonds could potentially experience capital losses so that they chose to withdraw their funds from Indonesia.
"We help BI a little if we can. We intervene in the bond market so that the yield does not rise too high. If the yield rises too high, what does it mean? Foreigners who hold bonds here have capital losses, they will leave," he said.
Therefore, Purbaya said the Ministry of Finance is trying to maintain the attractiveness of the bond market so that foreign investors remain and even return.
This step, said Purbaya, is more or less similar to the bond buyback mechanism which aims to maintain market stability while supporting the strengthening of the rupiah.
"So we control it so that foreigners don't come out or come in, even if the yield improves. So the rupiah will strengthen, kind of (buyback), we will enter starting tomorrow," he said.
Regarding its impact on the fiscal, Purbaya ensured that the 2026 state budget condition was still in the safe category and claimed that the government had actually used a higher exchange rate assumption than the official target in preparing the state budget, so that the weakening of the rupiah is currently considered still within the limits that can be anticipated.
"When we calculate it, we assume it is above the rupiah state budget assumption. So I don't umumin, but above that, it's not far away now. So the state budget is still relatively safe," he said.
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