Bank Indonesia Acts to Stabilize Rupiah as It Approaches Rp18,000 per Dollar
Bank Indonesia said the rupiah’s slide toward Rp18,000 per US dollar is tied to higher US inflation data and Middle-East tensions, and outlined its intervention tools.
Bank Indonesia explained that the rupiah’s depreciation toward the Rp18,000 mark is driven by unexpectedly high US inflation, which fuels speculation of a Fed rate increase, and by persistent uncertainty over Middle-East conflicts that sustain elevated oil prices. The bank highlighted a modest 0.17 percent quarterly weakening of the rupiah in Q4 and confirmed foreign reserves of US$146.3 billion as of September. To support the currency, it conducts interventions via overseas and domestic non-deliverable forward (NDF) contracts, spot market trades, and secondary-market purchases of government securities.
Additionally, the institution stresses its role in managing interest-rate structures by ensuring sufficient money-market liquidity. These measures aim to preserve market functionality and monetary stability amid rising global bond yields.
Why it matters
The rupiah’s fall affects import costs and inflation, impacting Indonesian consumers and investors.
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