BI Forex Reserves Hit 2-Year Low as Currency Interventions Intensify

Since December 2025 when Indonesia's foreign exchange reserves were still near a record-high level at USD $156.5 billion, the country's external buffers have seen a notable contraction (see the chart below).

While Indonesia managed to attract foreign exchange inflows through the government's recent global bond issuance alongside tax and services revenues, these receipts were insufficient to offset heavy capital outflows. The pressure stems from a broader emerging-market rout fueled by international geopolitical uncertainty, looming "higher-for-longer" interest rates in the United States, and local concerns over fiscal policy as well as the export monopoly handed to Danantara (for strategic exports such as coal and palm oil).

To protect a fragile rupiah, Bank Indonesia has consistently intervened in the market by selling US dollars. Furthermore, seasonal second-quarter corporate dividend payments to foreign investors have intensified pressure on the domestic currency.

Indonesia's Foreign Exchange Reserves (in USD million):

Overall, the foreign exchange reserves position at the end of May 2026 remains strong, equivalent to 5.6 months of imports or 5.5 months of imports and servicing government external debt. This is well above the international adequacy standard of around 3 months of imports. Bank Indonesia views these reserves as capable of supporting external sector resilience while maintaining macroeconomic and financial system stability.

It is interesting that in late May 2026, the Ministry of Finance successfully priced a major dual-currency global bond issuance consisting of USD $2 billion and EUR 1.25 billion (which included the fourth Sustainable Development Goals bond). But even with a fresh multi-billion dollar foreign currency injection, the overall reserves still net-dropped by USD $1.3 billion, underscoring how aggressively Bank Indonesia had to use the foreign exchange reserves to defend the currency in May 2026.

On Monday (8 June 2026), the rupiah is heading toward IDR 18,200 per US dollar. This historic low is not without risks for the government as pressures are building within Indonesian society. The benchmark Jakarta Composite Index contracted by 4.41 percent at the end of Monday's trading day.

‹ Kembali ke Berita Hari Ini

Bahas

Silakan login atau berlangganan untuk mengomentari kolom ini