Indonesia to boost coordination to stabilize weakening rupiah

Indonesia's government is prepared to intensify coordination with the Financial System Stability Committee (KSSK) to stabilize the nation's weakening rupiah, according to Finance Minister Purbaya Yudhi Sadewa.

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Maintaining the exchange rate is the jurisdiction of the central bank. Let them do it first.

Sadewa stressed that direct market intervention to manage the exchange rate is the responsibility of the central bank, Bank Indonesia (BI). "Maintaining the exchange rate is the jurisdiction of the central bank. Let them do it first," he stated, adding that the government would convene regular meetings but would increase coordination if necessary to improve the exchange rate.

The rupiah closed down 127.5 points, or 0.71 percent, at Rp17,966 per U.S. dollar on Wednesday. Sadewa attributed this recent depreciation not to weak national economic fundamentals but to volatile market sentiment and speculative rumors. He specifically refuted reports suggesting he had instructed commercial banks to conduct stress tests simulating a scenario where the rupiah falls below Rp18,000 per dollar.

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We will hold routine meetings as usual. However, if we see that intensive coordination is needed to improve the exchange rate, we will do it.

"If we look at it, this weakening happened suddenly in the last one or two days, caused by various issues in the market," Sadewa explained. "Some say I ordered banks to conduct stress tests if it exceeded Rp18,000, although I had heard similar issues before. So, many issues in the market are creating negative sentiment towards the rupiah."

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If we look at it, this weakening happened suddenly in the last one or two days, caused by various issues in the market.

Looking beyond short-term market fluctuations, Sadewa affirmed the Finance Ministry's focus on strengthening the national economy's foundations to drive growth. Bank Indonesia also reiterated its commitment to synergy with the government and employing structural measures to protect the rupiah. These include a strict limit on foreign currency purchases without underlying assets, effective June 2, 2026, and expanding the Local Currency Transaction (LCT) scheme to reduce reliance on the U.S. dollar.

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There are those who say I ordered banks to conduct stress tests if it exceeded Rp18,000, although I had heard similar issues before. So, many issues in the market are creating negative sentiment towards the rupiah.