Indonesia central bank committed to 'smart interventions' to defend rupiah

[JAKARTA] Indonesia’s central bank is committed to making “smart interventions” in the market to reduce pressure on the rupiah’s exchange rate versus the US dollar, its deputy governor told Reuters on Tuesday (May 12).

The rupiah hit a fresh record low of 17,525 per dollar earlier on Tuesday, falling as much as 0.7 per cent before recovering slightly.

Bank Indonesia’s Senior Deputy Governor Destry Damayanti said the rupiah was under pressure because of risk sentiment related to intensifying tensions in the Middle East, as well as seasonal domestic demand for the US dollar to repay debts and repatriate dividends.

“BI remains committed to remain in the market by conducting smart interventions in the spot market, DNDF (domestic non-deliverable forward), as well as (offshore) NDF, and to continue using all available monetary operation instruments so that we can reduce pressures on the rupiah,” she said.

“BI expects pressures to be seasonal in nature and they will ease so that the rupiah can return to its fundamental level,” Destry said.

Destry said there were signs of improving investor confidence, citing April foreign inflows of 61.6 trillion rupiah (S$4.47 billion) into the government bond market and the central bank’s short-term rupiah-denominated notes, known as SRBI.

SEE ALSO

Indonesia central bank bills outstanding rise most in two years

DECODING ASIA

Navigate Asia in
a new global order

Get the insights delivered to your inbox.

BI has increased issuances of SRBI and raised its rates in auctions to attract foreign investors, even as the central bank kept its benchmark rate unchanged since September.

As of the end of last month, BI’s outstanding SRBI reached 957.91 trillion rupiah, about 20 per cent of which were held by non-residents, up from a total of 730.9 trillion rupiah at the end of 2025, according to BI data.

The weighted average winning rate for its 12-month SRBI note at its latest auction on May 8 was 6.40002 per cent, up 148 basis points from the last auction of 2025. REUTERS