BI Steps Up Intervention to Support Rupiah

RRI.CO.ID, Jakarta - Bank Indonesia (BI) Governor Perry Warjiyo said the central bank has prepared short-term strategies to stabilize the rupiah, emphasizing that foreign exchange reserves will be used optimally to support the currency.

“We accumulate reserves when capital flows in and have no hesitation in using them to stabilize the exchange rate. We are confident the rupiah will tend to strengthen,” Perry said during an online press conference in Jakarta on Wednesday, January 21, 2026, as quoted by Antara.

He noted that solid domestic fundamentals, including low inflation, favorable growth prospects, and attractive investment returns, underpin BI’s optimism for a stronger rupiah.

The rupiah was recorded at IDR 16,945 per US dollar on Tuesday, January 20, down 1.53 percent from the end of 2025. On Wednesday, January 21, it rebounded slightly, closing at IDR 16,936 per US dollar, up 20 points.

Perry stressed that BI will continue direct market interventions through the spot market, domestic non-delivery forwards (DNDF), and offshore non-delivery forwards (NDF). He said coordinated measures across instruments are being taken to curb excessive volatility.

The governor explained that recent pressure on the rupiah was largely driven by global factors, including geopolitical tensions, US tariff policies, high US Treasury yields, and expectations of only a minor cut in the Federal Reserve’s benchmark interest rate. “The dollar strengthened due to capital outflows from emerging markets, including Indonesia. From early 2026 to January 19, there was a net outflow of USD 1.6 billion,” he said.

Domestically, Perry acknowledged that corporate foreign-exchange demand and market perceptions of the nomination process for BI’s deputy governor also contributed to pressure on the currency.

He emphasized that the nomination process was conducted legally and would not affect BI’s professionalism.

BI Senior Deputy Governor Destry Damayanti added that several neighboring countries also experienced currency depreciation, though she noted the rupiah’s decline was deeper due to market perception issues. “We need to reverse that perception and show that Indonesia’s economic condition remains secure. Our foreign exchange reserves are still strong at USD 156 billion,” she said.

Destry explained that BI is strengthening monetary operations through Bank Indonesia Rupiah Securities (SRBI), interest rate adjustments, and measures to make rupiah-denominated assets more attractive. The central bank also continues to promote local currency transactions (LCT).

Throughout 2025, LCT transactions reached USD 25.66 billion, more than double the USD 12.5 billion recorded in 2024. BI has also opened new trading pairs for the rupiah against the Japanese yen and Chinese renminbi to reduce dependence on the US dollar.

Destry said the move is important because many banks still rely on the dollar as an intermediary for renminbi transactions. “We are trying to cut that pattern so that banks needing CNY can transact directly. In the past month, BI has already been active in trading both currencies,” she said. ***