BI presses ahead to stabilize rupiah

Foreign investment flows into the Bank Indonesia Rupiah Securities (SRBI) have played a crucial role in stabilizing the Indonesian rupiah, according to Bank Indonesia (BI) Governor Perry Warjiyo. Speaking in Jakarta on Thursday, Warjiyo emphasized that the influx of foreign capital—reaching approximately US$13.3 billion—has contributed significantly to maintaining the value of the rupiah against the US dollar. As of June 15, 2026, the outstanding SRBI holdings totaled Rp1,021.1 trillion, with non-resident ownership accounting for Rp238.1 trillion, or 23.3% of the total. This substantial foreign participation has reinforced the stability of the rupiah exchange rate, which closed at Rp17,730 per US dollar on June 17, marking a 0.76% increase compared to its level at the end of May 2026.

Warjiyo credited this positive trend to BI's proactive stabilization policies aimed at shielding the currency from escalating global uncertainties and surging corporate foreign exchange demands within the country. Among these measures, the central bank has focused on attracting foreign portfolio investments to bolster the rupiah. A key strategy has been adjusting SRBI interest rates for three tenors—six, nine, and twelve months—to make the instrument more appealing to foreign investors. According to the latest SRBI auction results on June 17, the weighted average accepted rates were 7.12%, 7.33%, and 7.59% for the respective tenors. These rates reflect BI's effort to offer competitive returns while ensuring liquidity in the foreign exchange market.

In addition to adjusting interest rates, BI has also increased its interventions in both offshore and domestic non-deliverable forward markets, as well as the spot market. These actions have helped manage volatility and ensure that the rupiah remains resilient in the face of external pressures. To further encourage foreign investors, BI introduced a 10% incentive for hedging swaps, aiming to maintain investor confidence and offset the risks associated with holding foreign assets in an uncertain environment.

Warjiyo also highlighted BI's ongoing efforts to expand foreign exchange monetary instruments by facilitating spot and swap transactions involving the Chinese yuan (CNH) and the rupiah. This initiative aligns with the growing use of local currencies in international trade and investment, reflecting broader shifts in global financial dynamics. By promoting the use of the rupiah alongside other major currencies, BI seeks to enhance its attractiveness to international investors and reduce reliance on traditional reserve currencies such as the US dollar.

Looking ahead, Warjiyo expressed confidence that the rupiah would continue to stabilize and potentially strengthen, citing BI's commitment, the appeal of its yield offerings, and Indonesia's promising economic outlook. He reiterated that the central bank remains vigilant in monitoring global conditions and ready to adjust its strategies as needed to safeguard the currency's value.

While the success of BI's policies is evident in the recent performance of the rupiah, some analysts remain cautious. They point to the complexities of managing a large and diverse economy amidst global economic headwinds. Questions about the sustainability of current policies and the long-term impact of high interest rates on domestic growth remain open. Nonetheless, the continued flow of foreign capital into SRBI suggests that investors are still optimistic about Indonesia's economic potential and the effectiveness of BI's stabilization measures. As the situation evolves, the central bank will likely continue to balance its dual objectives of preserving currency stability and fostering sustainable economic growth.