Bank Indonesia keeps intervening to steady rupiah near record low
Bank Indonesia says it keeps operating in the currency market so the rupiah tracks its fundamentals, with the currency close to record lows, Reuters reports.
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what happened
Bank Indonesia said on Wednesday that it continues to intervene in the foreign exchange market to keep the rupiah in step with economic fundamentals, according to Reuters. Erwin Hutapea, the central bank's head of monetary management, said in a statement that the bank's active presence also aims to let market mechanisms work properly.
He blamed Wednesday's weakness in the currency on Middle East tensions, growing bets on a US interest rate hike, and a recent warning from index compiler MSCI that Indonesian equities could be moved to standalone status. The bank plans to continue stabilizing measures through non-deliverable forwards, the spot market and secondary-market purchases of government bonds.
The rupiah has been trading near its record low. On Wednesday it slipped by as much as 0.22% to 18,185 per dollar, according to LSEG data.
why it matters
A weaker rupiah raises import costs and strains dollar-denominated debt for Indonesian companies, so the intervention signals the authorities' readiness to defend the currency. The MSCI warning adds a separate risk for foreign investors in local shares.
market impact
Rupiah: central bank intervention supports the currency; MSCI warning weighs on Indonesian equities
- Indonesian rupiah pressure up — central bank operations in spot, NDF and bond markets support the currency
- Indonesian equities pressure down — a possible MSCI move to standalone status adds pressure on local shares
tags
instruments
sources
- Indonesia cenbank remains in FX market to ensure rupiah inline with fundamentals — Reuters, 28 October 2026 at 08:22 UTC
- Indonesia cenbank says it remains in FX market to keep rupiah in line with fundamentals — Reuters, 28 October 2026 at 08:47 UTC
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