Bank Indonesia Promises All-Out Effort to Stabilize Rupiah After 2.6% Gain in May

TEMPO.CO, Jakarta - Bank Indonesia (BI) announced that it is going all out to stabilize the rupiah’s exchange rate. According to Ramdan Denny Prakoso, Executive Director of BI’s Communication Department, the central bank will continue to carry out measured interventions in the offshore, spot, and Domestic Non-Deliverable Forward (DNDF) markets, along with purchasing Government Securities (SBN) in the domestic market.

Denny stated that these strategies have been effective in strengthening the rupiah. This is evident when compared to the performance of other Asian currencies in May 2025.

"Until May 26, the rupiah has strengthened by 2.6 percent," he said during a media briefing at Bank Indonesia's Central Jakarta office on Monday, May 26, 2025.

In regional terms, the rupiah trails behind the Thai baht, which appreciated by 2.95 percent, and the Malaysian ringgit, up 2.64 percent.

Meanwhile, the Singapore dollar and Philippine peso both posted gains of 1.9 percent. Denny emphasized BI’s continued commitment to maintaining market balance through its active presence to ensure the rupiah's stability.

Currency analyst Ibrahim Assuaibi projected that the rupiah would end stronger in the Rp16,140 to Rp16,220 per U.S. dollar range in Monday’s trading.

"Next Monday's trading, the rupiah will be volatile but close stronger," he said in a written statement on Friday, May 23, 2025.

Ibrahim noted that a mix of global and domestic factors is influencing the rupiah’s movement. Internationally, the weakening of the U.S. dollar is partly due to the U.S. Congress passing the Tax Cut Bill and Moody's recent downgrade of the US credit rating from Aaa to Aa1.

On the domestic front, the rupiah’s strength is supported by a 5.2 percent year-on-year increase in broad money (M2) as of April 2025, down from 6.1 percent in March. The money supply was recorded at Rp9,390.0 trillion. Narrow money (M0) also grew by 13 percent in April, following a 21 percent rise the previous month.

Alfitria Nefi P contributed to the writing of this article.

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