Indonesia Deploys Dual Strategy to Stabilize Weakening Rupiah

Bank Indonesia Governor Perry Warjiyo announced two key strategies to stabilize the rupiah, which has recently weakened beyond 18,000 against the U.S. dollar. The measures aim to restore market confidence and support the currency's stability.

The first strategy involves enhancing the attractiveness of investment instrument yields. This initiative, undertaken in collaboration with the Ministry of Finance, seeks to draw foreign capital back into Indonesia's domestic financial market. Governor Warjiyo explained that global interest rate hikes have led to foreign capital outflows from local markets, including stocks, government bonds, and Bank Indonesia Rupiah Securities (SRBI).

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Therefore, fiscal and monetary authorities agreed to jointly increase the attractiveness of yields so that these inflows can reunite and support the stability of the rupiah exchange rate.

"Therefore, fiscal and monetary authorities agreed to jointly increase the attractiveness of yields so that these inflows can reunite and support the stability of the rupiah exchange rate," Warjiyo stated during a press conference in Jakarta on Saturday, June 6, 2026.

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At the same time, it answers the concern of one of the rating agencies, that the interest payment is under control.

The second strategy focuses on maintaining sufficient liquidity within the money market and the banking system. While the government's funds remain managed by Bank Indonesia, the central bank has increased the interest remuneration paid to the government on these deposits. Warjiyo noted that this adjustment helps control the government's interest burden and addresses concerns from rating agencies regarding interest payments.

Finance Minister Purbaya Yudi Sadewa affirmed that Indonesia's economic fundamentals remain robust. He assured that fiscal policies would be implemented effectively to ensure continued economic growth and that the Ministry of Finance would strengthen policy coordination with Bank Indonesia. "Of course, if the policies are already integrated, with full synergy, it should restore market confidence in the rupiah," he said, expressing optimism that these combined efforts will strengthen, rather than further weaken, the currency.

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Of course, if the policies are already integrated, with full synergy, it should restore market confidence in the rupiah.