Bank Indonesia Governor Predicts Rupiah Will Continue to Strengthen

January 27, 2026 | 07:44 pm

TEMPO.CO, Jakarta - Bank Indonesia Governor Perry Warjiyo has expressed confidence that the rupiah will continue to strengthen, saying recent pressure on the currency was driven mainly by short-term technical factors rather than weakening fundamentals.

Perry said the rupiah’s earlier depreciation was largely the result of foreign capital outflows amid heightened uncertainty in global financial markets.

He also pointed to increased demand for foreign currency from domestic banks and corporations as economic activity picked up.

“In addition, rising demand for foreign exchange by domestic banks and corporations in line with economic activity has also affected the rupiah’s performance,” Perry said during a press conference of the Financial System Stability Committee (KSSK) at the Finance Ministry in Jakarta on Tuesday, January 27, 2026.

Despite these pressures, Perry said Bank Indonesia expects the rupiah’s underlying value to strengthen, supported by several key indicators. One is low inflation. He noted that recent inflationary pressures were not driven by core factors.

Core inflation stood at 2.38 percent year-on-year in December 2025, well within Bank Indonesia’s target range of 2.5 percent plus or minus one percentage point.

Another supporting factor is improving economic growth. Bank Indonesia projects Indonesia’s economic growth potential over the next two years at between 5.8 and 6.2 percent. Perry also said returns in the domestic financial market remain attractive for investors.

“And of course, this is supported by Bank Indonesia’s commitment to stabilize the rupiah and guide it toward a stronger level,” he said.

Perry reaffirmed the central bank’s commitment to maintaining exchange rate stability through a range of policy measures. These include measured interventions in offshore non-deliverable forward (NDF) markets, domestic non-deliverable forward (DNDF) transactions, spot market operations, and the strengthening of pro-market monetary operations.

The rupiah closed stronger at Rp16,768 per US dollar on Tuesday, January 27, 2026. Earlier this year, the currency had weakened to Rp16,956 per US dollar at the close of trading on January 21.

Read: Financial Sector Stable in Q4 of 2025, Says Finance Minister Purbaya

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