Jakarta. Bank Indonesia expressed confidence that the rupiah will regain stability and strengthen after briefly breaching Rp 17,500 per US dollar, arguing that Indonesia’s economic fundamentals remain resilient despite mounting global pressures.

Bank Indonesia Executive Director for Communications Ramdan Denny Prakoso said the central bank is intensifying its seven strategic measures to stabilize the rupiah, including interventions in the foreign exchange market and efforts to maintain investor confidence in domestic financial assets.

“Therefore, as conveyed by the governor, Bank Indonesia fully recognizes the current situation and continues to strengthen its seven strategic measures to ensure the rupiah remains stable and tends to appreciate,” Denny told reporters at the central bank’s headquarters in Jakarta on Wednesday.

Denny said BI’s optimism was supported by Indonesia’s relatively solid macroeconomic conditions, including steady economic growth, manageable inflation, prudent external debt management, and positive domestic economic prospects.

He added that Indonesia’s economy remained on track in the first quarter of 2026, while inflation was considered more stable compared to several other countries.

“We remain confident that with these measures, the rupiah will stabilize and tend to strengthen because Indonesia’s economic fundamentals are very strong compared to other countries,” he said.

The central bank also pledged to remain active in both domestic and offshore financial markets to contain rupiah volatility. After trading hours in Jakarta end, BI continues monitoring European and US markets to anticipate pressure from non-deliverable forward (NDF) transactions on the rupiah in offshore markets.

In addition, BI said it is strengthening coordination with ministries and government agencies to support exchange rate stability.

“We believe that synergy between Bank Indonesia, ministries, and institutions will help stabilize and strengthen the rupiah soon. There is no reason for the rupiah not to strengthen or remain stable,” Denny said.

Still, BI acknowledged that the rupiah remains under pressure from both external and domestic factors.

Globally, escalating tensions in the Middle East have pushed oil prices up more than 40% since late February 2026, fueling broader US dollar strength. Pressure also came from higher US interest rates, with the yield on the 10-year US Treasury nearing 4.5%, up from around 4% at the end of February, alongside a stronger US dollar index.

Domestically, demand for the US dollar has risen amid dividend repatriation flows, external debt payments, and increased foreign currency needs during the haj season, adding short-term pressure on the rupiah.

Rupiah closed 53 points stronger at Rp 17,475 per US dollar on Wednesday afternoon, recovering from the previous session’s close of Rp 17,528.

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