Rupiah Plunges to Around Rp 18,000, BI Says Middle East Conflict Is the Trigger
Bank Indonesia (BI) says the rupiah's weakening past Rp18,023 per US dollar on Thursday (6/4/2026) was spurred by rising geopolitical tensions in the Middle East. The escalating conflict has kept global oil prices high, bumping up global inflation risks and prompting investors to pull funds from developing countries, including Indonesia. Senior Deputy Governor Destry Damayanti stressed that BI will keep its presence in the market and step up intervention to stabilize the rupiah exchange rate according to its fundamentals. Interventions are carried out through NDF, spot, DNDF transactions, as well as purchasing government bonds in the secondary market, along with intensive coordination with market players.
BI is also pushing the use of local currencies in bilateral cooperation through the Local Currency Transaction (LCT) scheme with China, Japan, Malaysia, Thailand, South Korea, and the United Arab Emirates to reduce dependence on the US dollar. The value of LCT transactions keeps climbing, reaching about 22.7 billion US dollars by April 2026. Year to date, the rupiah has weakened around 7.44 percent, but BI insists Indonesia's external resilience is still solid with foreign exchange reserves staying high at USD146.2 billion at the end of April 2026.
https://www.gelora.co/2026/06/