Rupiah Slumps to Around Rp 18,000, BI Says It's Due to Middle East Conflict

Bank Indonesia (BI) said the rupiah's slide past Rp 18,023 per US dollar on Thursday (4/6/2026) was triggered by rising geopolitical tensions in the Middle East. Senior Deputy Governor of BI Destry Damayanti explained that the escalating conflict keeps global oil prices high, bumps up global inflation risks, and pushes investors to pull funds out of developing countries, including Indonesia. BI will keep showing up in the market by ramping up intervention through Non-Deliverable Forward transactions, spot, Domestic Non-Deliverable Forwards, as well as buying government bonds in the secondary market. Destry emphasized that coordination and communication with corporations and market players are being done intensively to maintain exchange rate stability in line with fundamentals. On top of that, BI is pushing for more 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 reliance on the US dollar. LCT transactions in April reached about 22.7 billion, up from around 25.7 billion for the whole of last year. Destry said the rupiah's weakening is still in line with other currencies in the region, and year-to-date it's down 7.44 percent. But she thinks Indonesia's external resilience is pretty good, with foreign exchange reserves still high at USD 146.2 billion at the end of April 2026. https://www.harianaceh.co.id/2026/06/04/rupiah-anjlok-ke-rp-18-000-an-bi-bilang-karena-konflik-timur-tengah/