Rupiah Weakened by Middle East Tensions and High Oil Prices

The Indonesian rupiah exchange rate has been weakening due to external factors, including geopolitical tensions in the Middle East and high oil prices above $100 per barrel. This has increased the risk of global inflation and put pressure on fiscal outlook.

According to Bank Indonesia's Head of Monetary and Asset Management Department Erwin Gunawan Hutapea, the central bank will continue to be present in the market to ensure stability of the rupiah exchange rate. To achieve this, they will manage interest rates in the money market through a strengthened pro-market monetary operations strategy.

Additionally, the bank will implement exchange rate stabilization and liquidity adequacy through hedging swaps with incentives. Interventions will be carried out consistently and continuously through Non-Deliverable Forward (NDF) transactions in the offshore market, spot transactions, and Domestic Non-Deliverable Forward (DNDF) transactions in the domestic market.

The bank's efforts to maintain a stable rupiah exchange rate are also reflected in their coordination with corporations and market players. This includes encouraging the inflow of foreign capital by optimizing incentives and diversifying foreign exchange demand through the Local Currency Transaction (LCT) scheme.