Jakarta. Bank Indonesia Governor Perry Warjiyo said on Monday that he remains confident the rupiah will strengthen in the third quarter of 2026 to around Rp 16,200–Rp 16,800 per US dollar.

Speaking during a parliamentary hearing with Commission XI of the House of Representatives, which oversees finance and monetary affairs, Perry said the rupiah is currently undervalued and does not reflect Indonesia’s underlying economic strength.

“We consider the rupiah undervalued because we still believe that throughout 2026 the average exchange rate will be around Rp 16,500, within a range of Rp 16,200 to Rp 16,800. We still believe it can move toward that level,” Perry said.

According to Bloomberg spot market data on Monday, the rupiah was trading at around Rp 17,669 per US dollar, significantly weaker than the Rp 16,500 average exchange-rate assumption used in Indonesia’s 2026 state budget.

Perry said the rupiah is currently facing pressure from seasonal demand patterns occurring between April and June, including increased US dollar demand related to the annual Muslim hajj pilgrimage and dividend repatriation by foreign companies.

“Starting in July, August, and September, the rupiah will strengthen. For the full year, we still believe the average exchange rate will remain within the state budget range, with the upper limit at Rp 16,800,” he said.

Perry added that Bank Indonesia has been working aggressively to stabilize the currency through intervention in financial markets.

In addition, the central bank and the government are seeking to maintain foreign capital inflows through optimization of Bank Indonesia Rupiah Securities, known as SRBI, to help limit capital outflows.

“We have increased the scale of intervention and stabilization efforts because global volatility remains very high,” Perry said.

Bank Indonesia has also been purchasing government bonds (SBN) in the secondary market to help stabilize financial markets and support the rupiah.

The central bank is also coordinating with the Financial Services Authority, or OJK, to tighten oversight of banks and corporations with high US dollar requirements, Perry added.