BI prepares monetary strategies to safeguard rupiah against US dollar

  Bank Indonesia (BI) is preparing a series of monetary, macroprudential and payment system strategies to maintain the stability of the rupiah exchange rate amid headwinds from a strengthening US dollar and persistent global inflation.

BI Governor Destry Damayanti stated that the central bank will continue to strengthen monetary policy, including through tighter monitoring of foreign exchange flows and enhanced liquidity support via monetary operations using repo facilities for non-government securities (non-SBN).

"We will strengthen the monitoring of foreign exchange flows and continue to bolster liquidity adequacy through repo monetary operations for non-SBN securities," Destry said during a hearing with Commission XI of the House of Representatives (DPR RI) in Jakarta on Monday.

The central bank 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) to help deepen domestic financial markets.

Beyond bolstering banking liquidity, the facility aims to deepen liquidity in the domestic money market for both types of corporate instruments. The central bank's defensive posture comes in response to capital outflows from emerging markets toward developed economies, triggered 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, with BI projecting one more quarter-point hike in the fourth quarter of 2026.

Driven by Fed tightening and global geopolitical tensions, the US Dollar Index (DXY) stood at 101.11, while the dollar index against Asian currencies reached 96.26.

Alongside monetary stabilization, Destry noted that BI will optimize macroprudential policies to foster national credit growth and preserve financial system resilience.

On payment systems, the central bank aims to expand cross-border payment integration while developing digital talent and artificial intelligence (AI) competencies through the Indonesian Digital Innovation Center (PIDI).