JAKARTA - Bank Indonesia (BI) Governor Perry Warjiyo believes that the rupiah exchange rate will strengthen again in the period from July to September 2026.
He added that optimism was driven by an estimate of a decline in demand for the US dollar.
Perry explained that historically the rupiah tends to experience pressure in April to June and this is due to the increased need for US dollars for repatriation of dividends, payment of foreign debt, and the need for Hajj transactions.
On the other hand, he added that the heating of global uncertainty due to the US-Iran conflict also put additional pressure on the rupiah.
"The rupiah is indeed generally under pressure in April, May, June because the demand is high. But starting in July, August, September, the rupiah will strengthen," he said in a meeting with Commission XI of the Indonesian House of Representatives, Monday, May 18.
With this development, he said that BI is optimistic that the average exchange rate of the rupiah throughout 2026 will remain in the range of Rp16,200 to Rp16,800 per US dollar, in accordance with the target in the 2026 State Budget.
Meanwhile, year to date (ytd), the average current rupiah exchange rate is still at the level of Rp16,900 per US dollar.
Perry added that the basic assumption of the exchange rate in the State Budget was set at IDR 16,500 per US dollar, with a lower limit of IDR 16,200 and an upper limit of IDR 16,800.
According to him, the movement of the rupiah will still be within this range in line with the seasonal pattern that usually occurs every year.
"What is the fundamental value? The average of the year is Rp. 16,500. The lower range is Rp. 16,200, the upper range is 16,800. Does BI believe it will enter? Enter. Because now Rp. 16,900 year to date. And our experience is that in April, May, June is indeed high. Later, if July, August will strengthen. So the whole year, the average of the year is still within the range of the national agreement (APBN), which was Rp. 16,200 to Rp. 16,800 of the agreement," he said.
Furthermore, BI has prepared seven policy steps to maintain rupiah stability, namely first is to strengthen foreign exchange market intervention, both in the domestic and foreign markets, through spot instruments, DNDF, NDF and ensure that rupiah stability is still supported by foreign exchange reserves which are considered adequate based on the IMF-ARA Metric.
Second, BI strengthens the interest rate structure of monetary instruments such as BI-Rate which will remain maintained at the level of 4.75 percent since January 2025, while the interest rate of SRBI with a 12-month tenor will increase to 6.41 percent to attract foreign capital flows and support rupiah stability.
Third, BI continues to buy State Securities (SBN) in the secondary market to maintain liquidity and strengthen coordination of fiscal and monetary policies, namely until May 2026, SBN purchases have reached Rp. 133.39 trillion.
Fourth, BI maintains the adequacy of liquidity in the money and banking markets through the growth of primary money (M0) which increased from 11.8 percent in March 2026 to 14.1 percent at the end of April 2026.
Fifth, BI lowered the limit for the purchase of US dollars in the domestic market without underlying transactions to 25 thousand US dollars per person per month starting June 2026, from the previous 50 thousand US dollars.
Sixth, BI accelerates the deepening of the foreign exchange market through the expansion of yuan and rupiah transactions in the Local Currency Transaction (LCT) scheme, as well as strengthening off-shore NDF intervention through a number of Main Dealers.
Seventh, BI increased supervision of banks and corporations that carry out transactions to purchase US dollars in large amounts.
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