The Indonesian rupiah hit a record low on Thursday, November 12, 2026, prompting Bank Indonesia to step in and stabilize the currency. The central bank intervened in various markets, including offshore non-deliverable forwards, domestic non-deliverable forwards, and spot markets, as well as purchasing government bonds in the secondary market. The rupiah weakened as much as 0.5% to 18,241 per US dollar, surpassing the previous record low of 18,190 seen in early June. The 10-year bond yield also climbed four basis points to 7.66%.
Bank Indonesia's executive director of Monetary and Securities Management, Erwin Hutapea, stated that the central bank is actively present in the market to maintain the stability of the rupiah exchange rate, ensuring it aligns with its fundamental value. The rupiah's decline has been exacerbated by a stronger dollar, which rose to an 18-month high on November 11 as traders anticipated a potential half-point Federal Reserve rate hike in December.
Investor sentiment remains fragile due to a combination of unfavorable news headlines and shifting outlooks for US inflation and Federal Reserve policy. Homin Lee, senior macro strategist at Lombard Odier in Singapore, noted that the rupiah continues to face poor investor sentiment due to the MSCI reclassification risk and Bank Indonesia’s relatively slow tightening cycle. The rupiah has weakened more than 8% against the US dollar in 2026.
Local regulators have intensified efforts to improve the equity market’s transparency and surveillance to avert MSCI’s double-downgrade threat. Goldman Sachs Group estimated about US$5.6 billion of passive outflows if Indonesia’s stocks are removed from MSCI’s indexes. Additionally, renewed concerns over political uncertainty following Vice-President Gibran Rakabuming Raka’s resignation have further hurt market sentiment.