Rupiah Nears 18,000 as Bank Indonesia Shifts to Hedging
Bank Indonesia is preparing new monetary, macroprudential and payment-system measures as the dollar to rupiah rate moves back near 18,000. Governor Destry Damayanti told lawmakers the central bank is expanding liquidity support and relying more on hedging.
JAKARTA — The dollar to rupiah exchange rate has moved back near 18,000, and Bank Indonesia is responding with a wider set of monetary tools. On Monday, Governor Destry Damayanti told lawmakers the central bank will lean more on hedging and tighten its monitoring of foreign exchange flows.
The pressure on the currency comes as the United States dollar hovers near a two-month high against other currencies, while the standoff between the US and Iran has pushed up oil prices and bond yields. The rupiah also breached the 18,000 level last week after Bank Indonesia kept its benchmark interest rate unchanged at 5.75 percent, even after a recent rate hike by the US Federal Reserve.
Destry said at a hearing with the House of Representatives that BI had cut spot market foreign exchange interventions to 30 percent of total interventions because they were too costly. The central bank is now relying more heavily on hedging to shield the rupiah from external pressure.
The shift matters because it shows BI is trying to defend the currency without leaning too hard on direct intervention. That can affect trading conditions, corporate financing and import costs if the pressure from the stronger dollar persists. For households and businesses watching the dollar to rupiah rate, the next moves from BI will shape how quickly imported prices and funding costs react to the foreign-exchange swing.
BI widens its policy toolkit
BI is preparing a series of monetary, macroprudential and payment system strategies to maintain rupiah stability amid a strengthening US dollar and persistent global inflation. Destry said the central bank will strengthen policy through tighter monitoring of foreign exchange flows and enhanced liquidity support via repo monetary operations for non-government securities.
BI has opened repo facilities for non-government securities issued by mortgage lender PT Sarana Multigriya Finansial (SMF). Starting in October 2026, the facility will be expanded to cover corporate bonds issued by infrastructure financing firm PT Sarana Multi Infrastruktur (SMI).
BI says the move is meant to deepen domestic financial markets as well as support banking liquidity. The central bank wants the facility to improve liquidity in the domestic money market for both types of corporate instruments.
Pressure from higher US rates
The central bank’s defensive posture comes as capital flows move from emerging markets toward developed economies, driven by higher US interest rates. The US Federal Reserve raised its benchmark interest rate by 25 basis points to a range of 3.75-4.00 percent on September 16, and BI is projecting one more quarter-point hike in the fourth quarter of 2026.
ANTARA also reported that the US Dollar Index stood at 101.11, while the dollar index against Asian currencies reached 96.26. Those levels underscore why BI is trying to balance intervention, liquidity support and market confidence at the same time.
At the hearing on Monday, Destry said BI had reduced its spot market foreign exchange interventions because they were too costly. That leaves hedging and domestic liquidity tools carrying more of the load as the rupiah stays under pressure near the 18,000 mark.
