Jakarta. Bank Indonesia (BI) needs to strengthen foreign exchange supply management in the domestic market as the rupiah weakens toward the Rp 17,000-per-dollar level, economists said, adding that an upcoming deputy governor reshuffle would not weigh on the currency as long as the central bank’s independence is preserved.

Bank Indonesia’s Jakarta Interbank Spot Dollar Rate (Jisdor) showed the rupiah weakening to Rp 16,981 per dollar on Tuesday from Rp 16,935 previously. Bloomberg data put the rupiah at Rp 16,966 per dollar as of 1:08 a.m. Eastern time on Wednesday.

Maybank Indonesia Global Markets Economist Myrdal Gunarto said pressure on the rupiah stemmed mainly from an imbalance between domestic dollar supply and demand. “From the demand side, foreign exchange needs remain relatively consistent, especially from importers and external debt payments. Any increase is still seasonal at the beginning of the year,” Myrdal said.

Supply, however, remains tight as exporters — particularly non-oil and gas natural resource exporters — have yet to optimally convert export proceeds into rupiah. “This creates an imbalance, so the dollar strengthens and the rupiah comes under pressure,” he said, adding that domestic fundamentals should otherwise support appreciation. “Fundamentally, conditions should point to a stronger rupiah, but we are seeing the opposite.”

Myrdal urged BI to boost onshore dollar supply, including by encouraging exporters to promptly convert export earnings, while calling for stronger government policies to keep foreign exchange circulating domestically.

“The rupiah is weakening even though inflows are entering our financial markets, the trade balance has been in surplus for 67 consecutive months, and the current account was still in surplus in the third quarter of 2025,” he said.

Myrdal added that BI should continue stabilization measures through interventions in the secondary government bond market, the spot rupiah market, non-deliverable forward (NDF) and domestic NDF instruments, as well as foreign exchange swaps.

M. Rizal Taufikurahman, head of macroeconomics and finance at the Institute for Development of Economics and Finance (Indef), said stabilization efforts cannot rely solely on spot market intervention. “When pressure comes from short-term capital flows, conventional intervention becomes less effective,” Rizal said. “A combination of spot intervention, foreign exchange derivatives, and bond market stabilization is needed to contain volatility and maintain investor confidence.”

Rizal said the rupiah’s move toward Rp 17,000 reflects global cyclical pressure rather than deteriorating domestic fundamentals, adding that the strong dollar support from high US Treasury yields and expectations of prolonged tight global monetary policy.

“This is not only affecting Indonesia but most emerging market currencies in Asia,” he said. Rizal stressed that the current weakening does not signal a crisis as long as volatility remains controlled.

“Inflation is within target, external balances are relatively solid, and foreign exchange reserves are adequate to absorb short-term shocks,” Rizal said, adding that policy alarms would only be relevant if depreciation spills over into inflation expectations or financial stability.

The House of Representatives’ Commission XI will hold fit and proper tests on Friday and Monday for three Bank Indonesia deputy governor nominees proposed by Prabowo Subianto: Deputy Finance Minister Thomas Djiwandono, BI macroprudential policy department head Solikin Juhro, and BI payment systems policy department head Dicky Kartikoyono.

Thomas is President Prabowo’s nephew and formerly served as treasurer of the Gerindra Party, a position he has since resigned from.

Commission XI chairman Mukhamad Misbakhun said the commission would decide on the nominee after the tests and submit the result to a plenary session next Tuesday.

Rizal said the leadership reshuffle would not add pressure on the rupiah as long as BI’s institutional credibility and independence are maintained. “As long as the boundary between fiscal and monetary policy remains clear, the nomination issue will not become an additional pressure factor for the rupiah,” he said.

However, LPEM FEB UI macro and financial markets economist Teuku Riefky cautioned that leadership changes could still raise concerns over BI’s independence. “If new appointments lead to policies that drift away from BI’s mandate, that would reinforce perceptions that central bank independence is weakening,” he said.

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