Indonesia central bank to continue intervening to defend depreciating rupiah

JAKARTA — Indonesia’s central bank will continue intervening in the foreign exchange markets to ensure moves in the rupiah exchange rate reflects the currency’s fundamentals, it said on Wednesday, as the currency trades near a historic low.

The rupiah has been steadily depreciating so far this year, and hit its weakest point since April 2025 on Tuesday before recovering slightly. On Wednesday, it had slipped 0.03% by 0230 GMT to trade at 16,865 per dollar.

The rupiah hit its all-time low against the U.S. dollar in April 2025.

The rupiah’s fall was in line with regional peers, driven by rising geopolitical tensions as well as market worries about the independence of central banks in some developed countries, said Erwin Gunawan Hutapea, head of monetary management at Bank Indonesia (BI), in a statement.

“Bank Indonesia will remain active in the market to ensure the rupiah exchange rate moves in line with fundamental values ??and sound market mechanisms,” Hutapea said, using a phrase the central bank uses to describe its interventions in the market.

BI has conducted interventions in offshore non-deliverable forward markets in Asia, Europe and America, as well as in the domestic spot, non-deliverable forward and bond markets, Hutapea said.

Analysts said there have also been domestic concerns about Indonesia’s fiscal position, after the government reported a budget deficit of 2.92% of GDP in 2025, close to a statutory cap of 3% of GDP. — Reuters