Rupiah Breaks Rp18,000 per US Dollar, BI Strengthens Market Intervention and Promotes Local Currency Transactions

Deputy Governor of Bank Indonesia (BI) Destry Damayanti. (Photo: ANTARA)

JAKARTA - Bank Indonesia (BI) Senior Deputy Governor Destry Damayanti emphasized that the weakening of the rupiah exchange rate is still influenced by the increasing geopolitical tensions in the Middle East which are heating up again and hindering the prospects for peace in the region.

For information, based on Bloomberg data as of 12.37 WIB, the rupiah was at the level of Rp18,043 per US dollar, weakening 76.50 points or 0.43 percent compared to the previous trading.

According to him, this condition encourages the world oil price to remain high, thereby increasing the risk of global inflation and triggering capital outflows from emerging markets.

On the domestic side, he added that foreign exchange needs were also still relatively large, especially for the repatriation of dividends and the payment of foreign debt (ULN).

Destry emphasized that year-to-date (YTD), the rupiah was recorded to have weakened by around 7.44 percent, although its movement was still in line with other regional currencies.

"Bank Indonesia will continue to be present in the market and increase the intensity of intervention to ensure that the market mechanism runs well and the stability of the rupiah exchange rate is maintained in accordance with its fundamentals," he told VOI, Thursday, June 4.

Destry said Bank Indonesia is committed to continue to maintain the stability of the rupiah exchange rate through various intervention steps in the financial market.

He added that the intervention was carried out consistently through Non-Deliverable Forward (NDF) transactions in the offshore market, spot transactions and Domestic Non-Deliverable Forward (DNDF) in the domestic market, as well as the purchase of State Securities (SBN) in the secondary market.

In addition to maintaining market stability, he explained that BI also strengthened the interest rate structure of pro-market monetary instruments to maintain the attractiveness of domestic assets for foreign investors, as well as coordinating and communicating with corporations and market participants.

On the other hand, Destry said Bank Indonesia also continues to encourage the use of local currency in bilateral transactions through the Local Currency Transaction (LCT) scheme as an effort to reduce dependence on the US dollar while mitigating the risk of exchange rate volatility.

"The cooperation has been established with China, Japan, Malaysia, Thailand, South Korea, and the United Arab Emirates. Diversification of trade transactions through this LCT scheme continues to increase in April reaching around 22.7 billion (US dollars) vs. last year's full year which was around 25.7 billion (US dollars)," he said.

He emphasized that despite the high global pressure, Indonesia's foreign exchange reserves remained strong at the level of 146.2 billion US dollars at the end of April 2026.