Jakarta. Bank Indonesia (BI) expects the rupiah to strengthen in 2027, forecasting the currency to trade within an average range of Rp 16,800 to Rp 17,500 per US dollar as improving global conditions, solid domestic fundamentals, and higher foreign exchange inflows support the currency.

Bank Indonesia Governor Perry Warjiyo said the central bank had revised up its global growth outlook for 2027 to 3.1% from 3.0%, a development that could reduce investment risks and encourage foreign capital to return to emerging markets, including Indonesia.

Perry said Indonesia's economic prospects were expected to improve further, supported by stronger growth, inflation that remains within the central bank's target range, and a healthy balance of payments with a low current account deficit.

He added that Indonesia continued to offer attractive investment opportunities due to competitive yields, deeper domestic financial markets, and adequate foreign exchange reserves.

Perry also highlighted the role of government policies in the natural resources sector in supporting the rupiah. These include the establishment of Danantara Sumberdaya Indonesia (DSI) under the Sovereign Wealth Fund Danantara and the implementation of the Natural Resource Export Proceeds (DHE SDA) policy, which aims to retain more export earnings within the domestic financial system.

"These policies will not only increase state revenues to finance stronger economic growth, but will also boost foreign exchange earnings, strengthen reserves, and support the rupiah going forward," Perry said at the parliamentary hearing on the government's 2027 Macroeconomic Framework and Fiscal Policy Principles (KEM-PPKF) on Wednesday.

Bank Indonesia reported that the country's foreign exchange reserves stood at $144.9 billion in May 2026, equivalent to 5.6 months of imports or 5.5 months of imports and government external debt servicing.

According to Perry, the reserve level remains well above the international adequacy standard of around three months of imports, providing sufficient room for the central bank to safeguard exchange rate stability.

As a way forward, Bank Indonesia will continue to optimize its policy instruments to maintain rupiah stability, including foreign exchange market intervention, liquidity management, money and foreign exchange market deepening, and reserve accumulation.

Perry stressed the importance of close coordination between the government and Bank Indonesia to preserve macroeconomic stability and strengthen investor confidence. Fiscal and monetary policies, he said, will remain aligned to support financial market stability, attract foreign portfolio inflows, and ensure adequate domestic liquidity.

The central bank's outlook suggests a stronger rupiah in 2027 compared with this year, when the currency came under pressure and at one point weakened beyond Rp 18,000 per US dollar.

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