Bank Indonesia Deploys USD 156 Billion to Protect Rupiah

RRI.CO.ID, Jakarta – Bank Indonesia (BI) is taking strong action to protect the Rupiah as global economic uncertainty causes investors to move their money out of developing countries. To keep the currency stable, the central bank is using its massive $156.5 billion safety fund (foreign exchange reserves) to back the Rupiah.

During a press conference for the first Financial System Stability Committee (KSSK) of the year on Tuesday, 27 January 2026, Governor of Bank Indonesia, Perry Warjiyo, conveyed that the bank is using a "multi-layered" defense. In plain terms, Bank Indonesia is actively stepping into the market to buy and sell currency whenever the Rupiah starts to swing too wildly.

By being a constant presence in these markets, the central bank aims to prevent the Rupiah from losing too much value and to keep the economy steady for everyday Indonesians.

“Bank Indonesia is committed to maintaining the stability of the rupiah exchange rate, including through measured intervention in non-delivery forward transactions in foreign and domestic non-delivery forward markets and spot markets in the country, as well as strengthening pro-market monetary operation strategies,” Governor Warjiyo stated.

He continued by saying that the central bank expects that the exchange rate will be stable, low inflation, and continued Indonesia economic growth.

The Rupiah has faced recent pressure, trading at Rp16,815 per USD as of 23 January 2026, a 0.83% depreciation from the end of 2025. This move was largely driven by a global "risk-off" sentiment and increased demand for foreign currency from domestic corporations to fuel economic activity. Despite these pressures, BI’s defense is yielding results. On 26 January 2026, the currency showed signs of recovery.

“On 26 January 2026, the rupiah closed stronger at Rp16,770 per US dollar,” the Governor confirmed. He continued by noting optimism on Indonesia’s economic stability, “we expect the rupiah to strengthen in line with Bank Indonesia's rupiah exchange rate stabilization policy and Indonesia's improved economic fundamentals.”

The central bank’s strategy has maintained its benchmark interest rate at 4.75% to keep Indonesian assets attractive to foreign investors. To manage liquidity effectively, BI has also optimized the issuance of Bank Indonesia Securities (SRBI) and engaged in secondary market purchases of Government Bonds (SBN).

BI's current monetary stance includes deploying Macroprudential Liquidity Incentives (KLM) totalling Rp307.9 trillion. It is to encourage bank lending to priority sectors like downstream industry and agriculture, both of which are part of Indonesia’s national program.

The central bank also planned to open the way for businesses to trade using other currencies like the Chinese Yuan and Japanese Yen, besides the US Dollar.

The governor underscored that Indonesia’s fundamental economic health throughout 2025 served as the ultimate backstop for the currency. Supported by data from the end of the year, inflation was firmly anchored within the target range of 2.5% ± 1%, and foreign exchange reserves rose to $156.5 billion by December 2025.

This reserve level is capable of covering 6.3 months of imports well above the international adequacy standard, the central bank believes the Rupiah is well-positioned for the future.The central bank will continue to closely monitor global dynamics, including trade tensions and geopolitical shifts.

BI will maintain its "pro-stability and pro-growth" policy mix to ensure the national economy remains on track for its 2026 growth targets.